Adjustment of bad debts.

The allowance for bad debt is given as 2000, in the year end an adjustment for bad debt, it is given as 9200, what will be the adjustment? Do i Credit 7200 or 9200 in allow. for bad debt account and debit 7200 or 9200 in bad Debt expense account.

asked Mar 24, 2017 in Trial Balance, Profit & Loss Account and Balance Sheet by Same (2 points) 1,582 views

1 Answer

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Journal entries for this will be:

Bad Debts A/c                    Dr.   9200

   To Sundry Debtors                                  9200

(This entry is to recognise bad debts)

Prov. for Bad Debts A/c    Dr.  2000

Profit & Loss A/c                Dr.  7200

   To Bad Debts A/c                                     9200

(This entry is to write off bad debts)
answered Mar 24, 2017 by jbsclasses (3,971 points)