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Sir Why bad debts are not writtenoff from balance sheet trade receivables in the problem??
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Best Answer
Entry for Bad debts usually is Bad debts A/c Dr To Trade Receivables A/c In this case, Debtors are not further adjusted in Balance sheet. But if its not credited to Tr Receivables and provision for bad and doubtful debts a/c is credited in that case Debtors are adjusted by reducing the provision in Balance sheet to show the net effect.
Sudha Reddy
Clarify your question please
Madam why bad debts are not deducted from trade receivables??
Thread Starter
sai tMadam why bad debts are not deducted from trade receivables??
Bad debts are deducted from Sundry debtors while making Final Accounts ( in balance sheet and second effect in p&l a/c ) . Whereas ; trial balance is statement showing all debit and credit balances of ledger accounts. And Bad debts is maintained as seperate ledger a/c. So, Bad debts are not deducted from Debtors at the time of making T.B.
Varun Mulay
Bad debts are deducted from Sundry debtors while making Final Accounts ( in balance sheet and second effect in p&l a/c ) . Whereas ; trial balance is statement showing all debit and credit balances of ledger accounts. And Bad debts is maintained as seperate ledger a/c. So, Bad debts are not deducted from Debtors at the time of making T.B.
Where separate ledger is prepared for bad debts
Thread Starter
sai tWhere separate ledger is prepared for bad debts
Are bhai, Bad debts A/C seperately banaya jata hai . Bad debts A/C mai posting hoti hai , " To , Trade receivables "
Thread Starter
sai tWhere separate ledger is prepared for bad debts
Bad debts is an expense . So , it always has debit balance
Varun Mulay
Bad debts is an expense . So , it always has debit balance
Then it is absorbed in Profit and Loss A/C debit side
Varun Mulay
Are bhai, Bad debts A/C seperately banaya jata hai . Bad debts A/C mai posting hoti hai , " To , Trade receivables "
At the time of posting in Sundry Debtors A/C , they are credited by , " BY , BAD DEBTS " ( as debtors are assets. To reduce them , they must be credited ) . Now you will fully understand . No need to deduct bad debts , because they are indirectly deducted from Trade Receivables or Sundry Debtors through posting in ledgers.
Thread Starter
sai tBelow screenshot is full question bro
Bri it is just like this. We will write only the debit balance in the left column and credit balance in the right column. In this we already written off that bad debt which means the given amount of trade receivables is obtained only after deducting the bad debt. That's why the balance sheet is like that.
Thread Starter
sai tKoi be clearly explain karona if it not possible to explain clearly here please explain in what's app it will be very helpful
I am sorry bro, I don't know how to explain further. Please wait. The faculty will response to this question. But I suggest you to go back and understand the trial balance unit well.
Vijay K
I am sorry bro, I don't know how to explain further. Please wait. The faculty will response to this question. But I suggest you to go back and understand the trial balance unit well.
Vijay bro , I think he is only pretending to be not understood.
Varun Mulay
Vijay bro , I think he is only pretending to be not understood.
He explained the concept but I understood a little bit I told I didn't understand it Then where is the question of pretending If u think like that then it's OK
Sudha Reddy
Entry for Bad debts usually is Bad debts A/c Dr To Trade Receivables A/c In this case, Debtors are not further adjusted in Balance sheet. But if its not credited to Tr Receivables and provision for bad and doubtful debts a/c is credited in that case Debtors are adjusted by reducing the provision in Balance sheet to show the net effect.
That means there is no further adjustment made in receivables so bad debts are written off already so it was transferred to p&l account is this correct madam
Thread Starter
sai tThat means there is no further adjustment made in receivables so bad debts are written off already so it was transferred to p&l account is this correct madam
Yes bro you are right, there is nothing other tha that.
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