ACC2-CH.17

Bad debt means an amount due from a debtor which is written off

as being ............................

What are double-entry rules for the amount written off? (for each debtor)

• Dr P/L

  Cr Bad debts

• Dr Bad debts

  Cr Bank

• Dr Bad debts

  Cr Debtor

What are double-entry rules for the total amount written off? (for all debtors)

• Dr P/L

  Cr Bad debts

• Dr Bad debts

  Cr Bank

• Dr Bad debts

  Cr Debtor

3 elements have to be considered to make a ..... .... ..... ........

-Gross debtors’figure

-Bad debts written off

-A percentage rate (eg 2%, 4%...)to calculate the provision for D.D for the remaining debtors(=(1)-(2))

What are book-keeping rules for the amount in provision for doubtful debts? (in the first year)

• Dr P/L and Cr Provision for doubtful debts

• Dr P/L and Cr Bad Debts

• Dr Provision for doubtful debts

  and Cr P/L

..................................... is an allowance for a certain level of debts becoming “bad” or irrecoverable during the course of the year.

• Provision for bad debts

• Provision for doubtful debts

• Bad debts

In B/S, ............... ............... = (remaining) debtors - Provision for doubful debts

• Net debtors

• Net debts

• gross debtors

remaining debtors = gross debtors – .... ....

Provision for Doubtful Debts at a specific rate of the provision (eg: 3%, 4%, 5%.. ) is calculated on the total of ............ ....................

What are the double-entry rules for the increase in provision for doubtful debts?

• Dr Bad debts

  Cr Provision for doubtful debts

• Dr P/L

  Cr Provision for doubtful debts

• Dr Provision for doubtful debts

  Cr P/L