bad debts
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Hi, <BR><BR>Can anyone help with a simple way to explain the procedure of bad debts.<BR>I'm still having trouble remembering it.<BR><BR>Also has anyone got the answer to the intermediate financial paper which was<BR>for Jun 04. Could you e-mail it to: trevor.barnard@ntlworld.com.<BR><BR>Much appreciated.<BR><BR>Shez
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bad debts
Hi Shez;<BR><BR>All I can suggest to you is that you practice doing it as much as you can and, like things do for me, it will just 'click'. <BR>You could try also repeating it out load, testing yourself if you like.<BR>But unless anyone else can think of anything then I think thats the best thing, after all it's how we have managed to learn everything else in our lives is'nt it!<BR><BR>;0)0 -
bad debts
a bad debt is a specific debt which is not expected to be repaid. In the question, it will say this debt were declared bad, then it should be written off. That is take it out of the total debts figure and put into P&L account for the loss. the procedur is: debit the Bad debts expense account in the general ledger, then credit Total debtors account or credit individual debtor's account in the sales ledger. this will reduce the total debtors figure in Balance Sheet. the Bad debts expense account will be closed off at the year end by transfering to P&L. that is, on the credit side of Bad debts expense account is P&L, in P&L, this bad debt will be shown on the left side as a loss.<BR><BR>Don't confuse the bad debt with the doubtful debts. <BR><BR><BR>Best regards<BR><BR><BR>Hong0