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Prepration of ledger of reserve for bad bebt
Accountancy
Can anyone please explain the preparation of reserve for b/d a/c if there is provisions is given
Answers (5)
Thread Starter
Anvar AnsariYes
Give me a sum. What do u want exactly. Its like any other T shape ledger. Balance b/d is opening which u will credit the account. Creation of further provision for which u will again credit account by profit and loss. To balance c/d is closing balance, the remaining figure is bad debt. Share a sum it will be easy
See it's quite simple, provision are of credit nature, so u will write BY balance b/d bcz it is having credit balance. So further creation of Provision means u need to increase provision for that u will credit it& debit by profit and loss account, u will have bad debts, so first u need to set off bad debt value how much ever u can bcz the sole purpose of creation of such provision is to reduce risk of bad debt. So if bad debt is to be knocked off against provision then reduce provision that means it should be debited and credit bad debt. The balancing figure will be closing.
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