Question

if we write off unpaid loans or sundry creditors, how asset value will be decreased. In order to cancel, we put write off in asset side. Asset side will be increased only, how it is decresed​

Answer 1

Answer:

when you cancle the liability without paying anything to them it means it's a profit for you and there will be no impact on item in the asset side. It is to be adjusted against profit and loss A/C. The final effect will be get through balancing profit and loss A/C which ultimately includes such profit and written in balance sheet. Ultimately the net effect will get adjusted.