Bad Debts, Doubtful Debts And Provision For Doubtful Debts-notes

Chapter 12: Bad debts, doubtful debts and provision for doubtful debts Accounting treatment of bad debts and doubtful debts Bad and doubtful debts are treated as ________________ which are _______________ from credit sales. Difference between bad debts and doubtful debts Bad debts refer to money owing by customers confirmed as ________________ while doubtful debts refer to money owing which is expected ______________ from debtors. Effect of bad debt and doubtful debts on accounts a) Since both bad debts and doubtful debts are ________________, they reduce __________ for the period. b) Bad debts are written off specific debtors’ balances, while doubtful debts are not written off debtors balances. Effect of provision for doubtful debts on the accounts The Provision for Doubtful Debts account is a ______________ ______________ account, i.e. it is presented as a deduction from _________ ____________ in the _____________ _____________ so as to report ____________ at ______ _____________. Reduction in the provision for doubtful debts in the given period It is treated as _____________ for the period. Treatment of bad debts recovered in the accounts Bad debts recovered are treated as ____________ for the period. Reporting of debtors at net debtors in the balance sheet Debtors stated as net debtors represent the amount of cash ________________ from debtors in the future.