bad debt and ledgers

what accounts are affected when writing off a bad debt? is the main ledger affected and why?

Comments

  • GreenMousey
    GreenMousey Registered Posts: 154 ? ? ?
    You're effectively writing off money that your company may never get. Therefore, it reduces your Sales Ledger Control Account (Cr) and the Bad Debt Write off A/c (Dr).
    These will both be included in later accounts.

    Hope I've been of help

    Mouse x
  • Miss Dazy
    Miss Dazy Registered Posts: 34 ? ? ?
    so the main ledger is affected as it reduces profit?
  • NO BUSINESS CASE
    NO BUSINESS CASE Registered Posts: 85 ? ? ?
    Yes Bad debt write offs are an expense of the firm (as you have done the work, incurred all the costs in doing the work and yet haven't physically gotten paid for what you did) so will reduce your yearly profits
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