Provision for bad debts
Girish L A (M.Com) (33 Points)
10 July 2015
Hi all.
could you teach, who provision bad debts is calculated and joural entries for the same.
Regards,
Girish
1 Replies
V P Narasimhan
(Accounts Manager)
(793 Points)
Replied 13 August 2015
Dear if you have Debtors Balance is Rs 5.00 lacs & you may by the way your clients payemnt nature you can analyse thast how much money not collectible or not expected which may intend to provide Provisions for Bad Debts. Normally 5% will be provided on Doubtful Debts i.e clients who will not Pay despite your regular folllow up.
Journal can be passed as below
Providion for Bad Debts a/c Dr: 25,000
Sundry Debtors a/c Cr 25,000 ( you may split custoemr wise)
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