Question

Bad debts aggregating rs 675 were written off during the year in sales ledger but were not adjusted in the general ledger.please provide me correct entry and wrong entry

Answer 1

Answer: correct answer : Bad debt ac-dr

To debtor ac

Wrong entry : no dr

To debtor ac

Rectify entry bad debt ac dr

To suspense ac

Explanation:

Answer 2

Answer:

Bad Debts Acc(Debit)  675

   To Suspense Acc(Credit) 675

(Being the number of bad debts written off not adjusted in the general ledger, now rectified)

Explanation:

The Bad Debts were written off during the year in the sales ledger meaning that the money that was to be received will not be received is now rectified as:

Bad Debts Acc(Debit)  675

   To Suspense Acc(Credit) 675

(Being the number of bad debts written off not adjusted in the general ledger, now rectified)

Definition:
Bad Debts:

• Loans or unpaid balances that must be written off because they are no longer considered recoverable are referred to as bad debt.
• Due to the inherent default risk of giving credit, this fee is a cost of conducting business with consumers on credit.

Ledger:

• A ledger is an accounting book or group of books where account transactions are noted.

Journal Entry:

• A journal entry is an act of recording any transaction, whether one is commercial or not.
• An accounting diary that displays the debit and credit balances of a corporation lists transactions. 

Suspense Account:

• Uncertain entries and inconsistencies are temporarily recorded in suspense accounts until they are investigated and given a final classification.
• It may serve as a clearinghouse for financial transactions made using erroneous account numbers.
• The provided account might not exist or it might be frozen or terminated.

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