Accounting Question - URGENT!?
I've been given a trial balance, and the things on it that I don't understand are: On it it says:
DR CR
Provision for Bad Debts: 450
Bad Debts 1100
OTHER NOTES AT THE END OF THE PERIOD:
a) The provision for Bad Debts is to be maintained at 5% of debtors
What do I do with this, for example what would be the figure that I put in the trading/p&l account, and what would I put in the balance sheet!
Thanks!
Answer:
You should make an entry to adjust the provision for bad debts to $55. So if it is currently higher, then lower it and vice versa. Other Questions and Answers: