provision for bad debts

[kaal]

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hi i wanna ask u people that how the provision of bad debts is made in accounting?

[maani]

Hi,
Provision for bad debts is that percentage of debtors which is likely to be irrecoverable...the percentage is estimated by having in view the previous years debtors records...

Ace

[Ice_Blue]

Dr. Bad Debt Expense
Cr. Provision for Bad Debts

Provision for Bad Debts is a Contra-asset a/c
Bad Debt Expense closes in the P/L a/c


Ice Blue