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+--- Thread: Provision for doubtful debts... (/thread-provision-for-doubtful-debts)
Provision for doubtful debts... - noman - 05-25-2005
hi...i need to ask one thing abt provisions..
there are two methods of doing questions..
1- we open separate accounts for "provision of doubtful debts" and for "bad debts".......we transfer the balance from both to P&L separately.
2-we open account for "prov. for doubt.. debts".....we transfer the bad debts to this account and then transfer the balance to P&L....
i have seen both the methods ..and in frankwood only the first method is mentioned.........but when i see solved past papers...in all those the second method has been used.....my cousin in mod.E also told me that second method is better...
what do u guyz suggest?? is the first one ok or not?
- noman - 05-30-2005
oh sab icap ke wakeelo....kidher gai???
you ppl talk so much abt general topics like you are so much experts and stuff.........why can't you answer my question.....can't u do any thing actual instead of talking uselessly???
- Desert Sleet - 05-30-2005
There is even one more method. As in first case we here also open 2 accounts 1 for provision of doubtful debts and the other for "bad debts" . But the entries are vice verca, we transfer the balance from Provison accounts to Bad Debts account and then by an adjusting entry to P/l a/c.
Each method is acceptable. I have always used this 3rd method.
__________________
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- noman - 05-31-2005
our teacher uses this third method.....but i don't like it(personal matter)......i didn't see this any book also.........
- eShA - 05-31-2005
hi
well i m not belong to icap ( not icap wakeel) but as business gradute i took several courses related to accouting n adv. accounting... and we always follow the 2nd method... well might be the reason is that both are the provision so we take both in same account
any further opinions n reason will b appreciated.
regard,,,,
from the best
and top of all
eShA
Although this may seem a paradox, all exact science is dominated
by the idea of approximation.