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If want to write off receviable what will be the entry book?
There are two steps to write off the receivables
1) Debit - Bad debts expenses
Credit - Allowance for Bad debts
2) Debit - Allowance for bad debts
Credit - Receivables
There are two way to record the entry of write-off in the entry:
1- The Direct Write-off Method for Bad Debt
this entry we have to do it if there is no allownace of bad debits has taken
Entry : Debit (Bad Debits Expenses)
Credit (Accounts Recievable A/C)
2- The Allowance Method for Bad Debt
If i have regester allownace for bad debits we have to entre like below
- if balance in same
Debit (allowance of bad debits) credit (account Receivable
- if balance less than actual
- (Debit allowance by the available balance & Debit bad debits bt the remaining bal ) credit account receivable
-
DR. BAD DEBTS EXPENSES
CR. ACCOUNTS RECEIVABLE
1-
Dr/ provision for doubtful debts
Cr / A/R ( customer Account )
Outstanding Receivable treated as Accured income(Sales made on Credit but payment not received from customer) and treated as Debtors on Assets side of the Balance sheet.
According to me If you want to write off ,Treat as Income on creditside of the P&L A/c
