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Query about write off debtors & creditors

samirshaikh (Account executive) (35 Points)

18 January 2019

Dear All,
if I want to close my debtors and creditors balance in current year what entry should I pass in tally? plz answer along under head.

Regards
Samir Shaikh

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10 Replies

Arunn Auto Sparess (203 Points)
Replied 18 January 2019

pass the journal both but again you have in balance sheet

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Suriyapriya Amudha (30 Points)
Replied 18 January 2019

Dr.Written Off

Cr. Party's A/c

If you want to close S.Drs account

rahul ramachandran (student) (71 Points)
Replied 18 January 2019

for creditor, it can't be as per written in real basis.. but if the amount is small and sure that u won't pay .. then u can write off... but anyway, in audit they will ask the reason for such write off..

entry:
Dr: party (s.crds) a/c
cr: misc income(or) liability no longer payable account (or) discount received.
but if the amount not material (small)you can prefer to adjust it with crediting bad debts, thereby reducing the total bad debts balance also..

prasad Nilugal ( GST Practitioner & Accounts ) (14606 Points)
Replied 18 January 2019

1) for Debtors write off

Bad Debts A/c Dr

To Sundry Debtors A/c Cr

( Being sundry debtors write -off )

Bad debts a/c will be transfer to P&L under Indirect expense

2) For sundry creditors write off

Sundry Creditors A/c Dr

To sundry creditors write off A/c Cr

(Being sundry creditors write off )

Sundry creditors write off A/c will be transfer to p&L under indirect Income

1 Like

Arunn Auto Sparess (203 Points)
Replied 18 January 2019

you adjust in cashbook

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prasad Nilugal (3914 Points)
Replied 18 January 2019

Normally we write off after 3 to 4 years

1 Like

pritesh (CA Final student) (7101 Points)
Replied 18 January 2019

agreed with prasad sir entry.

Sanjiv Rajpoot (3430 Points)
Replied 19 January 2019

agreed with prasad sir ji

Shubham (ca finalist) (22 Points)
Replied 20 June 2019

WHAT IS TO BE TREATMENT OF ITC TAKEN UPON PURCHASE, WHEN THE PAYMENT DUE TO THE SUPPLIER IS WRITTEN OFF???

MEANS PAYMENT WILL NEVER BE MADE. MOREOVER, WHAT IF PARTIAL AMOUNT IS PAID AND PARTIAL AMOUNT IS WRITTEN OFF?

prasad Nilugal ( GST Practitioner & Accounts ) (14606 Points)
Replied 20 June 2019

As per section 16 of the CGST act 2017 you have to reverse the ITC if payment is not made with in 180 days form the date of issue of Invoice by the supplier and add back to your tax liability in case payment will be never made by recipient .