Look a the question image where I tick marked my one and only doubt is that when bad debt is written why we did not deduct from trade receivables that 5000 amt as also no provision is there
Becoz trade receivable is an income then show in the balance sheet and bad debts is losss then it will shown in the profit and loss a/c...
But Bad debts A/c Dr. To debtor or trade receivables account At end of year Profit and loss account dr. To bad debt account So even in the first entry it self we have credited trade receivables so there amount must be deducted that's what I am trying to understand even when I created the trade receivables account I found out that trade receivables must be reduced but sir did not that is what I am trying to understand
Suraj Lakhotia Admin
When a bad debt happens, Bad debt a/c dr To Account Receivable (If given in trial balance, this entry is already passed. This also means that the bad debt is already deducted from the debtor balance)