How to treat the provision for bad debts which appear on
credit side of the p&L A/c.
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Answer Posted / surya kumar
At the first step the provision for doubtful debt should be
shown on the debit side of the frofit & loss account
correspondingly on the liability side of the Balance Sheet
(normally it is being netted off against Sundry Debtors for
disclosure purpose). After 2-3 years when the organisation
feels that there is no chance of recovery then the
provision shoud be written off against the amout
recoverable from debtors .
The case is just reverse in case of sundry creditors ,
whose demand is int acknowledge or whose whereabout is not
known.
| Is This Answer Correct ? | 11 Yes | 2 No |
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