IN MY TRIAL BALANCE ONE OF MY DEBTOR HAS BALANCE 54 LAKH.OUTSTANDING FROM 2016 & THE FIRM HAS CLOSED THE BUSINESS IN 2019,. NOW HOW CAN I MAKE ENTRY IN THIS ACCOUNT,
IN 2021-22 HOW CAN I MAKE ACCOUNT NIL
3 Replies
CA Amrita Chattopadhyay
(Audit & Assurance)
(13459 Points)
Replied 24 March 2022
If you are sure that the business is closed and there is no chance of recovery, you can transfer the amount to bad debts. You can debit the bad debts in profit & loss account and credit your debtors. The debtors would be Nil and your profit will also reduce.
CA Amrita Chattopadhyay
(Audit & Assurance)
(13459 Points)
Replied 24 March 2022
If you are sure that the business is closed and there is no chance of recovery, you can transfer the amount to bad debts. You can debit the bad debts in profit & loss account and credit your debtors. The debtors would be Nil and your profit will also reduce.
sabyasachi mukherjee
(27579 Points)
Replied 25 March 2022
If there is closure of business then how does it work?It will not be possible.
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