Question

explain the provision for bad and doubtful debt​

Answer 1

Hello Mate,

The provision for doubtful debts is the estimated

amount of bad debt that will arise from accounts

receivable that have been issued but not yet

collected. The provision is used under accrual basis accounting, so that an expense is recognized for probable bad debts as soon as

invoices are issued to customers, rather than

waiting several months to find out exactly which

invoices turned out to be uncollectible. Thus, the

net impact of the provision for doubtful debts is

to accelerate the recognition of bad debts into

earlier reporting periods.

A business typically estimates the amount of bad

debt based on historical experience, and charges

this amount to expense with a debit to the bad

debt expense account and a credit to the provision for doubtful debts account..... The organization should make this entry in the same period when it bills a customer, so that revenues are matched with all applicable expenses.....

Hope this helps you

Answer 2

Ram Ram bhai ✌️

The provision for doubtful debt:

☞ The provision for doubtful debts is the estimated amount of bad debt that will arise from accounts receivable that have been issued but not yet collected.

☞ The net impact of the provision for doubtful debts is to accelerate the recognition of bad debts into earlier reporting periods.

Hope it helps uh bruuhh❤