bad debt and ledgers

Miss Dazy

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

GreenMousey

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

so the main ledger is affected as it reduces profit?

NO BUSINESS CASE

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