Help - Finance P & L sheet

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:30AM in AAT student discussion
Help please.<BR>Just trying to revise Bad debts and provison for bad/ doubtful debts.<BR>Can someone please tell me, on the Profit and Loss Account, under expenses you put :<BR><BR>Bad debts <BR>and Provison for doubtful debts.<BR><BR>On the provision for doubtful debts, what figure do you put is it the whole provison or just the adjustment made to the previous year???<BR><BR>Does that make sense.<BR>I am having problems revising bad and doubtful debts does anyone have any easy ways???<BR><BR>Bet<BR>

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    Help - Finance P & L sheet

    The provision account is in the balance sheet and the whole amount goes in, not just the adjustment<BR><BR>Annette
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Help - Finance P & L sheet

    Thanks Annette<BR><BR>I agree that the provision has to be taken from the debtors figure after any bad debts have been written off, but it still has to go as an expense does it not in the P& L account?<BR><BR>When you set up a provison for bad debts you <BR>DR doubtful debt expense account (P & L)<BR>CR provision of doubtful debts (B/S) and this is the figure taken from Debtors.<BR><BR>Have I got that wrong????<BR><BR>Bet
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Help - Finance P & L sheet

    Bad debts & Provision for bad debts<BR><BR>Sometimes you are asked to calculate provision for bad debts in the adjustment, you have to compare the new provision with the old in the (trial balance) if there is a decrease, the difference is added to the gross profit, if there is an increase, only the difference goes under expenses in the P & L. In the balance sheet, the whole provision (not the difference only) is deducted from debtors.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Help - Finance P & L sheet

    You could put it in a doubtful debts expense account but in practice it usually goes into the bad debts expense account so you would have any specific bad debts and the difference from the provison account.<BR><BR>You would show the figure in the doubtful debts provision account in the trial balance and then deduct it from the debtors before compiling the profit and loss and balance sheet.<BR><BR>Does that help?<BR>Annette
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Help - Finance P & L sheet

    <br><br><< <i>The provision account is in the balance sheet and the whole amount goes in, not just the adjustment<BR><BR>Annette</i> >><br><br>
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Help - Finance P & L sheet

    does anyone have answers to the Mfr paper wed 16 june 2004 (1998 standards) please<BR>
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Help - Finance P & L sheet

    does any one have answers to the MFR paper wed 16 june2004 (1998 standards)<BR>

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