1. Profile photo of sohailssaeed says

    sir, i understand little bit from your last statement .so 660/= has not been minus from receivables 11910/= if not you are right and iam wrong, tell me more 11910-(660+810)=10440. we shall show 10440 in F/P .and 1470 all expense goes to I/S. than i cleared. thanks

  2. Profile photo of sohailssaeed says

    Detors Dr.11910 $
    provsion for bad debts Cr.(in trial balance) 660$

    addition information:
    increase the provision for bad and doubtful debts by 810$
    please explain me in written and easy form so that i can understand better.

    • Profile photo of John Moffat says

      @sohailssaeed, You do not say what it is you want to know!
      I assume that you are taking the International variant of F3, in which case it is not debtors, but receivables. Also, it is not provision, but allowance.

      Whichever variant you are taking, there is no such thing as a provision for bad and doubtful debts. The provision (or allowance) is only for doubtful debts.

      The double entry is credit the allowance (provision) with 810 and debit the expense account with 810.

      So in the Statement of Financial Position you will show receivables of 11810 less an allowance of 1470.

      In the Income Statement there will be an expense of 810.

      • Profile photo of sohailssaeed says

        @johnmoffat, sir how you get 11810 .
        according to my mind 660-810=150 receiveables 11910-150=11760 is that true.?for financial position.
        i was practicing the financial position. this one difficultly came into being.

      • Profile photo of John Moffat says

        @sohailssaeed, I have seen the question, and what I wrote before is correct.

        The question says to increase the provision by 810. This means that the provision will be 810 higher so 810 + 660 = 1470

        There is no mention of changing the receivables and so they stay at 11910.

        On the statement of financial position, you would show receivables of 11910 less the allowance (provision) of 1470.

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