when does accounts receivable have a credit balance?
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Answer Posted / preet bedi
Accounts receivables are sundry debtors and usually have a debit balance.Now sometimes debtor fails to pay his amount partially or completely.The amount of debt which cannot be recovered from the debtor is called bad debt,now bad debts needs to be written off by passing following journal entry
Bad debts account Dr.
To sundry debtors
so sundry debtors shows credit balance.
Note: it is the entry posted in adjustment in final accounts.
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