222

$show=home

Welcome to Accounting Education

The Free Online University with 3400+ Accounting contents as study material which can watch, read and learn anyone, anywhere.

Start your studies

$show=home

Why Accounting Education Important


Free
Simple
Have Quality Study Material
Taught by Expert

Connect Vinod Kumar (Educator)

Why Accounting Education Volunteer


Free training
It's educational
It's fun
It helps others

Become Volunteer Teacher

Journal Entries for Bad Debts


Bad debts means that money which we could not acquire from our debtors. We may give the goods or money on credit to our debtors. Same debtor or debtors has to give us the money of his taken debt. But when will not give the debt, it will be the loss of our business, so, we have to pass the entry for bad debts like the entry of any other business loss. All losses account will be debited and any asset which will decrease, will be credited. In case of bad debt following journal entry will be passed.

1. Journal Entry for Bad Debts Loss

For showing this journal entry, it is very necessary that a debt must be uncollectible. We have done all the efforts but we did not collect the debt. After failure of final notice to the debtor, we will convert our debt in bad debt. 


 Bad Debt Account Debit

Particular Debtor Account Credit


Example : Sham did not pay us our Rs. 5000 debt and Ram did not pay us our Rs. 10000 debt up to end of the financial year. This receivable amount has converted in to bad debt loss by following entry.

Bad Debts Account Debit 15000

Sham Account Credit 5000

Ram Account Credit 10000

2. Journal Entry for Bad Debts Written Off

Written off means, we are closing bad debt account by transferring bad debt amount to the debit side of our profit and loss account . When we will show bad debts in the debit side of profit and loss account, bad debts account will show same amount in its credit side. So, both side of bad debt account will be equal. No balance will carry forward.



Profit and Loss Account Debit

Bad Debts Account Credit




Example : Sham did not pay us our Rs. 5000 debt and Ram did not pay us our Rs. 10000 debt up to end of the financial year. This receivable amount has converted in to bad debt loss and then written off by transferring it in profit and loss account

Profit and Loss Account Debit 15000

Bad Debts Account Credit 15000

3. Journal Entry  for Bad Debts Recovered

When bad debts are recovered from debtor after the closing of our financial year. We will show it as our income. Like other incomes, bad debts recovered will also be our income. So, this account will be credited. We will debit that asset account which will increase. By earning this income, our bank account will increase because we received same money from our debtor. At that time, following entry will be passed.




Bank Account Debit

Bad Debts Recovered Account Credit




Example : Sham did not pay us our Rs. 5000 debt and Ram did not pay us our Rs. 10000 debt up to end of the financial year 2011. In the financial year 2012, we received Rs. 6000 from Ram and 2000 from Sham on 7th June 2012

7 June 2012 

Bank Account Debit 8000

Bad Debt Recovered Account Credit 8000


4. Journal Entry  for Bad Debts Recovered which has been transferred to profit and loss account 




Bad Debts Recovered  Debit

 Profit and Loss Account Credit




Example : Sham did not pay us our Rs. 5000 debt and Ram did not pay us our Rs. 10000 debt up to end of the financial year 2011. In the financial year 2012, we received Rs. 6000 from Ram and 2000 from Sham on 7th June 2012. At the end of 2012, we transferred it to profit and loss account.

31st Dec. 2012 

Bad Debts Recovered Account Debit 8000

Profit and Loss Account Credit 8000

COMMENTS

: 21
  1. Very simple to understand now the entire concept.
    Thanks a lot.

    ReplyDelete
  2. very helpful. I have a question, what are the entires when we write off an amount as a bad debt and during the same year the debtor recovered all or part of this amount? Thanks a lot.

    ReplyDelete
  3. I dont understand accounts if anybody explains me for twice or 10 times but after reading this all verity entry of bad debts with examples awesome only 1 time I read...awesome and I made this page as my book mark...well done 👍

    ReplyDelete
  4. HI,I have a question on how to write off a bad loan considering the fact that it has been accruing interest.

    ReplyDelete
  5. entries affected by writting off bad debts with accrued interest

    ReplyDelete
  6. What is the Complete entry from Provision for Bad Debt to Actual Bad Debt?

    ReplyDelete
  7. Please solve my this problem
    Z-10000/-
    Z BECOME INSOLVENT AND 40 PAISE IN A RUPEE COULD BE RECEIEVED FROM HIS ESTATE

    ReplyDelete
  8. It is easy to understand, good explain.

    ReplyDelete
  9. Thanks for sharing information Sir

    ReplyDelete
  10. Previously I did not understand how bad debts journal will booked but now I am able to explain end to end...thanks much !!!

    ReplyDelete
In comment, you can give your feedback, reviews, ideas for improving content or ask question relating to written content.


Name

access,2,account,87,accountant,92,Accounting,679,accounting definitions,99,accounting ebook,3,Accounting education,85,accounting procedure,2,accounting process outsourcing,2,Accounting Software,54,advance,3,advertising,6,africa,7,Amalgamation,6,amendments,16,announcements,61,Annuity,2,assets,51,audit,46,auditing,41,Australia,2,B.Com.,22,balance sheet,80,bank,111,Bank reconciliation,12,banking,33,basic accounting,110,BBA,1,benefits,13,best,50,bill,12,black money,3,blog,12,bloggers,7,book keeping,4,bookkeeping,2,Branch Accounting - full tutorial,8,budget,35,Budget variance,13,business,65,businessman,9,CA,29,calculator,4,canada,3,capital,72,capital budgeting,27,career,20,cash,40,cash book,8,cash flow statement,8,Chiense,1,children,13,china,6,class,3,coaching,2,coins,2,college,6,commerce,10,commerce students,7,company,36,computer,9,computer accounting,1,conference,4,Contact vinod kumar,1,Control Your Spending,27,corporate accounting,69,cost,159,cost accounting,194,cost center,8,cost centre,1,CPA,2,credit,18,credit card,10,cs,10,currency,35,data,11,Debit and credit,16,debit cards,1,debt,62,debtor,21,degree,6,depletion,2,depreciation,38,Diwali Messages,12,documents,4,dollar,5,domain,3,Downloads,3,Dubai,1,e-accounting,17,earning,17,education,246,Education Loans,6,email,15,employee,4,EPF,2,ERP,7,euromoney,1,examination,7,excel,17,excise duty,6,expenses,65,facebook,7,factor of loan,1,fans,2,feature,32,fifo,5,FII,4,fiji,1,finacle,1,finance,821,Finance Journal Entries,4,Financial,133,financial accounting,144,fire insurance,3,flickr,2,flow,4,forensic,4,forex,21,formula,8,france,1,fraud,6,free,2,fun,34,function,1,fund,48,GAAP,36,GDP,1,gdr,5,germany,1,gold,7,goodwill,4,goodwill accounting,3,google,34,google apps,3,google apps,1,google base,1,google buzz,1,google calendar,1,Google docs,38,google finance,3,google fusion tables,1,google talk,5,govt.,5,GST,33,guide,85,health,6,Hindi,2,Hindi Language,3,history,3,holding company,3,How to treat FBT in Tally 9,1,HRA,3,ICAI,11,ICAWI,3,ICICI Bank,1,IFRS,10,income,17,income statement,11,Income Tax,7,India,57,indian railway,1,Indonesia,1,inflation,4,inflation accounting,3,infographics,8,information,7,inspiration,175,insurance,14,insurance accounting,2,Intangible,3,interest,26,international,7,Internet,41,Introduction of Tally 9,1,inventory,41,investment,135,investment in Shares,6,invoice,3,IT,1,Japan,1,Job costing,4,journal entries,135,Journal Entries eBook Help,4,Kalculate,1,keyboard,3,kuwait,2,laptop,2,law,4,LBT,1,learning,36,lease,5,lecture,11,ledger,15,leducation,1,Leverage Analysis,7,liabilities,16,lifo,3,linkedin,1,loan,74,logical point,1,loss,5,loss of profit,1,M.Com.,5,m.phil,2,malaysia,3,management accounting,129,manual accounting,4,manufacturing account,1,market,11,marketing,3,mastercard,2,material,13,MBA,14,MCA,1,media,4,migration,2,mobile,9,money,61,ms word,3,ms. excel,14,multi currency in tally 9,1,Multicurrency Accounting,3,mutual fund,30,national security,1,new and sacrifice ratio,1,new york times,1,new zealand,1,news,1,NGO,5,nonprofit-accounting,7,North Georgia Mountains,1,Notification,1,NPV,17,NSE,1,odbc,2,office,10,oman,1,online application,2,online accounting,11,Online Accounting Course,4,otcei,1,pakistan,3,parents,3,Partnership,1,pay pal,3,pdf,4,Personal Finance,6,pie chart,1,pie chart of income,2,pnb,4,podcast,1,ppf,1,presentation,10,price,7,privacy policy,2,prof. vinod kumar,13,profit,24,profit and loss account,11,project management,11,provision,13,purchase,9,puzzles,2,quickbooks,2,Quote,22,quotes,42,quotes of svtuition,1,rating agency,2,ratio analysis,34,RBI,7,readers,13,real estate,13,rectification of errors,11,remote control,2,reports,10,reserves,8,responsibility accounting,4,retirement,2,revenue,3,Revenue reserves,2,review,7,risk,11,rupees,9,salary,5,sale,12,saudi arabia,1,saving,19,sbi,9,scholarship,2,school,1,SEBI,13,security,30,service tax,23,share,20,share trading,15,Shares,16,shri lanka,3,singapore,2,sms,6,social accounting,7,society,5,solution,214,South Africa,1,stock,24,stock exchange,22,structure,6,student,39,students,69,study,21,subsidiary company,2,svtuition,13,swiss bank,2,tally,99,tally 9,8,Tally 7.2,8,Tally 9,42,Tally.ERP 9,59,tanzania,2,tax,94,Tax Accounting,30,TDS,15,teacher,62,teaching,112,technology,33,test,40,testimonial,15,testimonials,15,thailand,1,tips,60,trading,5,trading on equity,2,transaction,7,trend,12,trial balance,13,truthfulness,1,tuition,3,twitter,10,UAE,5,UGC - NET Commerce,13,UK,11,United Arab Emirates,1,university,9,usa,25,valuation,8,VAT,22,Video,34,Voucher and vouching,4,Wealth,8,wikipedia,25,working capital,29,youtube,14,
ltr
item
Accounting Education: Journal Entries for Bad Debts
Journal Entries for Bad Debts
https://1.bp.blogspot.com/-Mb1drqkPejM/UC9HFQdZtCI/AAAAAAAAIkQ/fDATg2W9iss/s1600/debt+bad.PNG
https://1.bp.blogspot.com/-Mb1drqkPejM/UC9HFQdZtCI/AAAAAAAAIkQ/fDATg2W9iss/s72-c/debt+bad.PNG
Accounting Education
https://www.svtuition.org/2012/08/journal-entries-for-bad-debts.html
https://www.svtuition.org/
http://www.svtuition.org/
http://www.svtuition.org/2012/08/journal-entries-for-bad-debts.html
true
2410664366776677676
UTF-8
Loaded All Posts Not found any posts VIEW ALL Reply Cancel reply Delete By Home PAGES Contents View All RELATED CONTENTS FOR YOUR LEARNING Topic ARCHIVE SEARCH ALL POSTS Not found any post match with your request Back Home Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sun Mon Tue Wed Thu Fri Sat January February March April May June July August September October November December Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec just now 1 minute ago $$1$$ minutes ago 1 hour ago $$1$$ hours ago Yesterday $$1$$ days ago $$1$$ weeks ago more than 5 weeks ago Followers Follow THIS PREMIUM CONTENT IS LOCKED STEP 1: Share to a social network STEP 2: Click the link on your social network Copy All Code Select All Code All codes were copied to your clipboard Can not copy the codes / texts, please press [CTRL]+[C] (or CMD+C with Mac) to copy