12th BOOK KEEPING BY AJAYSANTHOSH MOURYA
1.1.11 Bad Debts
Debts which cannot be recovered are called bad debts. It is a loss for the business.
Example: The trial balance as on 31st March 2004 shows, Sundry
debtors Rs.52,500. Adjustment: Write off Rs. 2,500 as bad debts.
Debts which cannot be recovered are called bad debts. It is a loss for the business.
Example: The trial balance as on 31st March 2004 shows, Sundry
debtors Rs.52,500. Adjustment: Write off Rs. 2,500 as bad debts.
Bad debts will be shown
i) on the debit side of Profit and Loss account and
ii) on the assets side of the Balance Sheet by way of deduction from sundry debtors.
i) on the debit side of Profit and Loss account and
ii) on the assets side of the Balance Sheet by way of deduction from sundry debtors.
Lesson to be Continued
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