Bad Debt and Bad Debt Provision & Adjustment

System

Has anyone got any info on remembering how to deal with Bad Debt, Bad Debt Provision Adjustment account & Bad Debts Written off.

I understand the principles of what a Bad Debt is and what a provisional badt debt is, it is how to put them into the accounts and what the adjustment account does etc.

Exams are only jus over a week away and i am now panicking......

System

Re:Bad Debt and Bad Debt Provision & Adjustment

If the Closing Balance of the Provision for bad debts is higher than the Opening Balance Of Provision for bad debts, the differnce would be

1 Debit bad debts expense

2 Credit Provision for bad debts

If the Closing Balance of the Provision for bad debts is Lower than the Opening Balance Of Provision for bad debts, the differnce would be

1 Debit Provision for bad debts

2 Credit bad debts expense.

Basicaly a bad debt written off would be debited in the same bad debts expense account.

Double entry would be

Debit bad debts expense account

Credit Debtors

If we have to make an adjustment to the debtors account because of a bad debt, we first make the entry into the accounts. Therefore,

Double entry would be

Debit bad debts expense account

Credit Debtors

then we can calculated the Closing balance of the new provision for bad debts and determine wheather or not there is an increase/decrease Of the Closing Balance of Provision for bad debts.