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What are the adjusting entries if a company made allowance for doubtful account of 200 and in the next year the company collected all of the amount 200?

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Question ajoutée par Ahmed Hamed , Senior Accountant , Majid Al Futtaim
Date de publication: 2014/11/07
mohamed Hakim CMA CPA Candidate
par mohamed Hakim CMA CPA Candidate , Accounting Manager , Andersen saudi arabia

If allowance entry was created then you have to reverse it and make collection entry like this 

Reverse allowance 

Debit / allowance for doubtful accounts200

Credit / bad debt expense                          200

Then normal cash entry for receivable

Debit / cash entry                              200

Credit /  accounts receivable Debit200

Utilisateur supprimé
par Utilisateur supprimé

bad debts dr200

             allownce for bad debts cr200

after reciving amount,

allownce for bad debts dr200

                  other income cr200

Fahd Mohammed Suleman
par Fahd Mohammed Suleman , CFO , Tajeel Business Commercial Services

Dr.           Cash/Bank

         Cr.                         Accounts Receivable

 

For the provision you can ignore to adjust with each and every specific collection like this. Next time when you are closing the books, if you are closing monthly then at the end of month you will record the provision of doubtful  for that month, you just reduce that amount from it and make the entry for the balance.

 

 

Rahul Sasidhran
par Rahul Sasidhran , Sr.Accountant , R.M.CO.Groups Thrissur,Kerala,India

In this case your entry is like that 

Bad  & Doubt full debts A/C Dr.  200

      To Party                      200

(Debt Party has been Credited)

2nd case you get that money next year

Cash   A/C    Dr.        200

    To   write off Bad & Doubt full debts  200

(Should shown in  credit side of P& L A/C as an income ,write off Bad & Doubt full debts.)

Waseem Azam
par Waseem Azam , Senior Procurement Executive , Global catering Services

No change in a/c receivable in the year of allowance made but when it recovered we treat it as other income.

Arrey Andymike Agbor
par Arrey Andymike Agbor , Sales Representative / Customer Service , ELTA HRG

Dr cash/bank200 (Bad debt recovered)

     Cr  Income statement 200 (Bad debt recovered)

Mohamed Ibrahim Soliman
par Mohamed Ibrahim Soliman , Financial Controller, acting CFO , Sinad Holding Co

DR/ Allowance for doubtful debts

      CR/ provision no longer required

Anwar Khan
par Anwar Khan , AR Lead for Shared services center , Fugro

In case of doubtful allowance the receivable remains the same. At the time collection the entry for doubtful debt will be reversed and collection will be recorded as normal. 

If the receivables were written off then the collection will be treated as other income.

shakir Mahboob (CPA)
par shakir Mahboob (CPA) , Manager Accounts , Islamabad Serena Hotel

Will be treated as other income in the financial statements.

Ahmed kandil
par Ahmed kandil , Cost Controller , Battour Holding Cpompany

2 enteries 

1- 

dr / allwance for bad debt 

  cr / bad debt expenses 

 

2- 

dr / cash 

 cr / A/R