Qualification > Commerce

URGENT Accounting question

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cs:

--- Quote from: crooked on September 15, 2010, 09:00:32 am ---See, the thing is, yuh don't have to show the workings on the balance sheet fer the bad debts. The value of debtors in the balance sheet is the value after deducting the bad debts. However the bad debt is treated as an expense and must be debited to the Profit and Loss A/c.

Do yuh understand or do yuh want me to elaborate further?

--- End quote ---


you mean it is in the information is in the trial balance, therefore don't need to deduct from debtors?

S.M.A.T:

--- Quote from: cs on September 15, 2010, 08:40:53 am ---here it is:

--- End quote ---


In the question you have given you don't need to subtract bad debts from debtor in the balance sheet this is because the bad debts is not written in the additional information which means the effect of the bad debt is already taken on the debtor so you don't need to subtract it from debtor in the balance sheet.

For example in the question below 'Debts of $200 were to be written off'  is in Additional information at 30 April 2008 which means the debtor amount($9 000) showed in 30 April 2008 balances is before the bad has been written off from the the debtor amount,so in this question you must subtract $200 from $9000 in the balance sheet.

Hope that helps :)

Crooked:

--- Quote from: cs on September 15, 2010, 10:30:00 am ---
you mean it is in the information is in the trial balance, therefore don't need to deduct from debtors?

--- End quote ---

Yuh need to concentrate on the dates when yer doing accounting. They've prepared the final accounts of 30th nov 2009. In the additional part, they've given the projected debtors as 12000 as at 30th nov.  Yuh need to calculate the bad debts from the question. It's pretty easy and therefore i won't be explaining it unless yuh request me to. :D

And as bad debts are expenses, they'll only be recorded in the P n L a/c. :D

Anymore queries?

cs:
Thanks both of you. +rep Now i understand it.. :) really helpful

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