PROVISION FOR BAD DEBTS IS GAIN OF THE COMPANY IT IS IN
APPEARS IN CREDIT SIDE OF THE PROFIT AND LOSS ACCOUNT
BECAUSE RULE OF NOMINAL ACCOUNT DEBIT ALL EXP AND LOSSES
CREDIT ALL INCOMES AND GAINS.


REGARDS S.SHIVA KUMAR
9848083705

Bad debts is the cause for creating provision for 
baddebts,when a person feels the amount cannot be returned 
then its going to be a baddebt,as a precautionary measure 
he opens a provision for baddebts for fullfilling a minimum 
amount with himself.so obviously we hae to show baddebts 
on  debit side of P&l a/c and provisions on credit side of 
p&l a/c.

Provision for Bad Debts should appear as a credit on the 
Balance Sheet, and Bad Debts written off is an expense item 
on the Profit and Loss Account

At the first step the provision for doubtful debt should be 
shown on the debit side of the frofit & loss account 
correspondingly on the liability side of the Balance Sheet 
(normally it is being netted off against Sundry Debtors for 
disclosure purpose). After 2-3 years when the organisation 
feels that there is no chance of recovery then the 
provision shoud be written off against the amout 
recoverable from debtors .

The case is just reverse in case of sundry creditors , 
whose demand is int acknowledge or whose whereabout is not 
known.