Accounting

This query is : Resolved

Neeru Jangir (Querist)
Follow

21 May 2014 DEAR SIR, my query is following -credit sale made to a debtor.being payment due from long time period ,a provision was created. later on recovered from debtor. what will be accounting enries in all such cases. what will be entry of provision reversal. will it be adjusted against our co.'s income.
thanks in advance.

Vishnu Saboo

Vishnu Saboo (Expert)
Follow

22 May 2014 at the time of making provision the entry must be
Provision for doubt ful debts Dr (P&L)
To provision for doubtful debts (grouped in customer)

now since that amount not converted in bad debts you have to reverse the same or you may pass
provision for doubtful debts (grouped in customer) Dr
To provision for bad debts written off (P&L)