Writing off bad debts

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CMA RAVI (Querist)
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17 September 2012 What will be accounting entries from creating a provision to writing off bad debts. Pls explain with an example.

Ahamed

Ahamed (Expert)
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17 September 2012 First of pass the journal entry of actual bad debts .

Entry for recording actual bad debt which did not record in books of business

1. Bad debts account Dr. xxxxx
To Sundry Debtors Account xxxxxx

Entry for transferring bad debts to provision for bad debts Account

2. Provision for bad debts account Dr. xxxxxx
To Bad Debts account xxxxx

Transfer of provision for bad debts account to profit and loss account

3. Profit and loss account Dr. xxxxxx
To Provision for bad debts account xxxxx