Bad Debts Provision for Bad Debts

The Company made Sales to Kishan & Co of Rs 35000

Kishan paid only Rs 5000 Cash and Rs 27000 by cheque in full settlement


Kishan& Co Dr 35000
            To Sales 35000        

Bank Dr 27000
Cash Dr 5000
      To Kishan 32000


Bad Debts Dr 3000

      To Kishan 3000 

The Company made Sales to Kishan & Co of Rs 35000

The Company estimates that only 32000 is recoverable from Kishan

 

Kishan Dr 35000
           To Sales 35000

 

P& L Dr 3000
      To Provision for Bad Debts 3000

 

 

Suppose next month kishan paid 32000 by cheque in full settlement


Bank Dr 32000
Provison for Bad Debts 3000
                       To Kishan 35000

 

Suppose next month kishan paid 30000 by cheque in full settlement


Bank Dr    30000
Provison for Bad Debts 3000
Bad Debts   2000
                   To Kishan 35000

 

Suppose next month kishan paid 34000 by cheque in full settlement

Bank Dr 34000
Provison for Bad Debts 3000
                To Kishan 35000
                To Excess Provison w/o 2000

   
  1. Accounts and Finance
  2. Step 3 Passing Book Closure Entries
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CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 8 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com .
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