how do i make ledger account for provision for doubtful debts

  • 1 vote

hi i need to knw how to make ledger accounts for provision for doubtful debts and machinery

Posted Mon 16th May, 2011 @ 17:35 by Suwad

2 Answers

  • 3 votes

Hiya!

I'm not sure what you mean but hopefully this helps. If not or if you need any more help feel free to contact me :) but

For doubtful debts you have to debit the income statement and credit the provision for doubtful debts account

1) Calculate the provision

2) Open a provision for doubtful debts in the general ledger and make a credit entry for the provision

3) Make a matching debit entry in the income statement (in the form of an expense)

4) Ensure that when trade receivables (debtors) are recorded in the balance sheet the are reduced by the provision

Answered Wed 18th May, 2011 @ 13:37 by Rachael
  • 1 vote

hi 

actually a provision always have a credit balance, so when u open a provision for doubtful debts u must dr income statement cr provision, when there is an increase in provision u apply the same double entry and when there is a decrease its vice versa
if u have anu more question please feel free to ask 

Answered Tue 6th September, 2011 @ 12:56 by nishta bissessur