how to write off bad debts?
Debit: provision for bad debts
Loan: accounts receivable
Recover confirmed bad debts and write off accounts receivable
Step 1: Cancel bad debts
Debit: accounts receivable
Loan: provision for bad debts
Step 2: Recover accounts
Borrow: bank deposits
Loan: accounts receivable, etc. Accounts receivable refers to the money that an enterprise should collect from the purchasing unit or the receiving unit for business activities such as selling goods and providing services. The recorded value of accounts receivable includes the contract or agreement price (except unfair) that the enterprise should receive from the buyer or the labor service provider for selling goods and providing services, the output tax of value-added tax, and the packaging fee, freight and miscellaneous fees paid by the purchasing unit.
what is the provision for bad debts?
bad debt provision is an asset allowance account.
the losses suffered by an enterprise due to bad debts, such as the buyer's refusal to pay, bankruptcy, death and other reasons, are bad debt losses.
an enterprise shall evaluate the book value of accounts receivable on the balance sheet date. if the accounts receivable are impaired, the amount written down shall be recognized as impairment loss, and provision for bad debts shall be made.
calculation of bad debt reserve payable in the current period:
bad debt reserve payable in the current period = bad debt reserve amount calculated according to accounts receivable in the current period-or+credit or debit balance of "bad debt reserve" account
bad debt reserve payable in the current period = ending balance of accounts receivable at the end of the period × estimated proportion.