Cap= assety-fig
assets = fiat cap
OS MONAL ENTRY SUP Capa
Bad Debts
When the goods are sold to come ce credit, and if the amount become
recoverable due to his insolvenger for some other reason, the amount ore
called bad debts For recording it had debts account is debited and the com
cui credited
For example: Ravi who owed 10.000 declared insolent and
rupee is received from his estate. The journal entry will be
To Rom
in the rupee received from Ravi on bis insolve
ILLUSTRATION 11.
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The journal entry would be
cash account Dr 1 rupee
bad debt account Dr. 9999
to Ravi account cr 10000
Explanation:
cash is being received so the rule is debit: what comes in for assets
bad debt is an expense so rule debit : all the expenses and losses
credit : all incomes and gains
Ravi is a personal account so rule is debit the receiver and credit: the giver as Ravi has to pay us the cash so Ravi account is giver
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