Interested to Buy Any Domain ? << Click Here >> for more details...
What is journal entry to create the Provision for Bad &
Doubtful debts?
- 13 Answers
- 93411 Views
- ABS, Infosys, I also Faced
- E-Mail Answers
Answer Posted / premsundar
You should first recognize that a Provision is made just to hold back the profits you might otherwise distribute as a dividend Distribution of dividends de-recognizing possible losses would amount to 'repayment of capital'; a process that can be gone through only under the provisions of Sec 100 of the cos Act
The entry
Doubtful debts a/c Dr
To Provision for Bad and Doubtful debts
Year end
P&L a/c Dr
To Doubtful debts a/c
( This is a Closing entry)
In the Balance sheet, the Provision for bad and Doubtful debts a/c is shown as a deduction from Sundry debtor's a/c This satisfies the MATCHING PRINCIPLE and the concept of Prudence
When Bad Debts are actually incurred later they need to be set off against the Provision already created for the purpose
Bad debts a/c Dr---
To Sundry Debtors a/c----
Prov for Bad & Doubtful debts Dr---
To Bad debts a/c
Recognize that P&L a/cdoes not suffer a debit again
To
| Is This Answer Correct ? | 35 Yes | 4 No |
Post New Answer View All Answers
how to create salary and pf statement in excel sheet?
sir i want to know that where we taken entry of sals return in excise in manufecturing unit tell me .
Explain a time when you have not met your goal?
how pass journal entry in the month ending for input vat and out put vat
When Iam entering sales in Tally ERP 9, It Is not reflecting in the stock, Why itt is happends like this ? I entered sales with delivery note Number, So think that is because it is not reflecting in Stocks, and when iam checking in the stocks its saying negative stock
I select in Vendor Master - in defualt data material - Purchasing Group as a Subcontractor but how to get report or list only Subcontractor Vendor Master in sap?
Tell me what is an over accrual?
In the balance sheet, where do you show tds?
In accounting, are assets a permanent account?
in terms of accounting the trial balance when is it taken?
Describe yourself briefly why you are outstanding for this post "Finance Coordinator"?
Explain me what makes a successful account manager?
how will you handle fairs in askening with the a high posistion person in a company? how will i develop my attitude when interviewed? am always scared.
Why are accounting standards necessary?
what is profit and loss(dr) in cash flow statement?
