This lesson explains how to record bad debts, allowance for doubtful accounts/allowance for credit losses/allowance for bad debts, and allowance for credit losses adjustment in the income statement and balance sheet with information from the pre-adjustment trial balance and additional information given. We look at what to do with the old bad debts and allowance for bad debts and new bad debts and allowance for doubtful debts when asked to post them to the income statement and balance sheet. This is bad debts and allowance for doubtful accounts treatment in final accounts.
Direct Write-Off, Balance Sheet & Income Statement Method of Bad Debt & Allowance for Bad Debts: https://youtu.be/vMaBV3RlmOs
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please be my teacher
Your so amazing, thanks for this information God bless you
Why didn’t you use the adjuster bad debts balance which you subtracted to get your outstanding receivables?
I didn’t understand that part thoroughly
There is just one point where the author has confused. When you pass an entry to add to "allowance for doubtful accounts", we debit BAD DEBT expense and credit ALLOWANCE FOR DOUBTFUL ACCOUNTS. This bad debt amount together with its opening balance is then shown as part of operating expenses. Somehow the author has led me at least to believe that instead of debiting BAD DEBT Expenses account, we need to debit operating expenses or other operating expenses. The author needs to clarify this.
Thank you Sir.
Nice video.
no why didnt Bad debts increase with the provision increase??????????? If the double entry is Bad Debt Dr and Provision Ac Cr. how come bad debt stayed the same in the income statement?????? Am i a joke to accounts???????????????????????????????????????????????????????????????????????????
Hi, I reckon you should've explained what'd happen if the allowance entry was an income
Does that mean if we get the info of "actual" Bad Debts, then we should put this info into the Expenses, while on the contrary, if it doesn't show the "actual" Bad Debts, then we can put the estimated Bad Debts(which is calculated by knowing the adjusted Allowance for Doubtful Debts) into the Expenses account?
hi, your work is very helpful regarding this i have a question please . How do you calculate Bad debt on an income statement when you are only given 1.to write of an amount of R998 and 2. A provision for bad debts should be provided of 5% of good debts. thank you