Question

How will we treat bad debt reserve in statement of profit and loss account if they are given on credit side of trial balance.

Answer 1

Provision for bad debts is a contra-asset account, with a credit balance. It is the cumulative amount of bad debt expense. It is applied to receivables to reflect the risk in those assets. ... It will be shown as an offering credit balance against Accounts Receivable on the Asset side of the Balance Sheet.