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a) a sale is made
b) an account becomes bad and is written off
c) management estimated the amount of uncollectibles
d) a customer’s account becomes past due.

1 Thought on when an allowance method is used to account for uncollectible accounts, bad debts expese is debited when…?
  1. Reply
    MidhuN Jose
    July 22, 2011 at 12:10 am

    Question was not clear…I will try to say

    A provision for bad debt can be made at any time if the circumstances require so. But to write off a bad debt in profit and loss account you should ensure that_____

    The amount recoverable is due and has taken all possible efforts to recover the same from debtor. Sometimes proof for legal actions shall also be verified by auditors. Or, if the debtor was declared insolvent. Or in case of time barred debts.

    In all the above situations we can write off a debt as bad debts.

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