3.7 bad debts and doubtful accounts
bad debts (Bad Deb) refers to the claim debtor follow-up until the end, but do not receive payments from these accounts receivable and disposed off the account
.Doubtful (Doubtful Accounts) means that receivables are expected to be collected are not considered an expense of the period but are not treated as an expense on revenue code
.Tolerance for bad debts or doubtful tolerance (Allowance for Doubtful Accounts) means the amount set aside for the receivables is expected to be charged. So that the remaining amount is the net value of the receivables is expected to collect money. Accounting about bad debts have 2 ways:
.
1. direct disposal method is an easy way. Note When the actual bad debts caused by
debit-bad debts (510) x, xxx-credit
-receivables (103) x, xxx-
2. How to set the margins calculated based on percent of sale because if our sales opportunity is often lost due to the proportion of total sales, or calculated from the accounts receivable amount receivable per cent of it is only causing bad debts (this method if there ever. Or it may be calculated on the basis of individual receivables in order to obtain the closest truth. When calculating and accounting by
Debit-doubtful (510) x, xxx-
-credit allowance doubtful accounts (104) x, xxx
.-to ensure that accounts receivable billing will not save. :
Debits-total allowance (104) x, xxx-credit
-receivables (103) x, xxx-
.Bad debts are recoverable means that ever cut into bad debts. Later brought money paid to the undertaking, regardless of whether it is partial or total number of recorded cases, as follows: 2
1. The case cuts to the actual bad debts, set up new accounts, and then save the receipts. Debit accounts receivable is as follows:-
(104) x, xxx-
-credit bad debts have been night (404) x, xxx-
debit-cash (101) x, xxx-credit
-receivables (103) x, xxx
.-2. The case set the tolerance to new bad debts receivables area with popular reduction allowance doubtful accounts and save receipts. Debit accounts receivable is as follows:-
(103) x, xxx-
-credit allowance doubtful accounts (104) x, xxx-
debit-cash (101) x, xxx-
.Accounts receivable-credit (103) x, xxx.-
.
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