explain the good and bad doubtful debts
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Bad Debts : Bad Debts means the amount which is lost because a customer fails to pay. When bad debts occur , Bad Debts A/C is debited and Customer A/C is credited.
All Bad Debts should be debited to the Profit and Loss A/C of the year in which the sale took place.
Good Debts : When a customer purchases any goods and makes the payment without any default, such debts are good debts.
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hey mate here is your answer
good debts --> these are the total amount of goods sold which we receive from the purchaser without any kind of difficulty or any kind of default.
bad debts --> this occurs when a person is liable to pay us some amount of money and the amount can't be recovered from that person as the person had become insolvent or bankrupt.
that amount is said to be as bad debts
good debts --> these are the total amount of goods sold which we receive from the purchaser without any kind of difficulty or any kind of default.
bad debts --> this occurs when a person is liable to pay us some amount of money and the amount can't be recovered from that person as the person had become insolvent or bankrupt.
that amount is said to be as bad debts
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