provisionforbaddebtaccountsolution-210522055926 (1).pptx

Accounting Provisions for Bad debt accounting

1. Provision for bad and doubtful debt account Particulars Amount Particulars Amount Step 2: To Bad debt a/c (old + new) Or Step 4: To Provision reversed a/c (Or To P/L a/c – Balancing figure ) Step 3: To Balance c/d (Find closing or new Provision for bad debt-given in additional information) xxx xxx xxx Step 1: By Balance b/d (Find Opening or old Provision for bad debt- given in cr side of trial balance) Step 4: By Estimated bad debt a/c (Or By P/L a/c – Balancing figure ) xxx xxx xxxx xxxx Dr. Cr. Remember: For Bad Debt: Bad debt (old)- Given in Dr side of trial balance Bad debt (New/further/additional)- Given in Additional information / Adjustment Closing or New provision for bad debt: If amount is not given but % is given in AI Closing or New provision for bad debt: (Debtors – new bad debt) x % =xxx

2. 7.

3. a. Journal Entries in the books of ABC Trading Solution Date Particulars  LF  Debit Rs. Credit Rs.   i . Provision for bad & doubtful debt a/c-----------------Dr To Bad debt or sundry debtors a/c {Or Bad debt a/c -------------------Dr To Sundry Debtors a/c} (Being further bad debt written off) 2,700 2,700  ii. Estimated bad debt a/c--------------------------------- Dr (Bad debt+ New Provision – old Provision) To Provision for bad & doubtful debt a/c (Being estimated bad debt expenses charged) 1480 1480  iii. Profit and Loss a/c--------------------------------- Dr To Estimated bad a/c (Being estimated bad debt a/c closed or transfer to P/L a/c) 1480 1480

4. Assignment > Complete CW (up to 9) > Example 2 Thank you