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What is bad debt ? how does it effects on Balance sheet and
profit and loss account?
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Answer / dj
Debts which cannot be recovered or become irrecoverable are
called Bad Debts. It is a loss for the business.For
example,if Sundry debtors on 31st March, 2007 are 55,200,
bad debts on that date are Rs.200,Entry passed is:
Bad Debts a/c Dr. 200 -
To Sundry Debtors a/c - 200
The two-fold effect of bad debts will be that bad debts will be:
(1) Shown on the debit side of Profit & Loss Account, and
(2) Shown on the asset side of the Balance Sheet by way of
deduction from Sundry Debtors.
| Is This Answer Correct ? | 14 Yes | 1 No |
Answer / rajeev chaturvedi
Bad debts means in the end of financial year , the amount
which does not received from debtors.
its shows the loos has been increased & debtors has been
decreased . So debited the p& l Account . & credited the
debtors.
| Is This Answer Correct ? | 6 Yes | 0 No |
Answer / nazeer hussain.h
A bad debt is irrecoverable (i.e, cannot be realised)
| Is This Answer Correct ? | 6 Yes | 2 No |
Answer / ramadhan mpita
Bad debt are debts of the bussiness which are incorrectable
| Is This Answer Correct ? | 0 Yes | 0 No |
Answer / pihu
In business there are some sundry debtors who did not turn-up
and clear their balances and are hard to be recovered. The
amount lying with these debtors are known as bad debts.
Entry in P/L Account. Bad debts are shown in the debit side
of the P/L account.
Entry in Balance Sheet. Sundry debtors will be less by bad
debts amount.
| Is This Answer Correct ? | 0 Yes | 0 No |
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