Qualification > Commerce
Accounting HELP !!!
contraentry:
When bad debts are recognized, the debtors account is closed by Posting PnL as a loss on the credit side of the debtor (in this case W.Blanco)
Accepting that, W. Blanco's account no longer exists in your books of accounts.
However, later on, when you have recovered the money lost, it comes in as a way of cash / bank, in this example it is Cash.
Hence the journal entry: Cash Dr.
Bad Debts Rec A/C : Cr.
At the end of the year, the Bad Debts Rec account balance will transfer into the profit and loss account as an income, just the way discount received does.
holtadit:
--- Quote from: Almostfreaking on May 23, 2010, 04:37:25 pm ---Accounting Paper 3, M/J 2007 Q2.
The Bad Debt Recovered A/c
The mark scheme says "cash" on the credit side. Should it not be W.Blanco, who is the debtor?
--- End quote ---
There are two ways to reinstate a debt - read the MS (scroll down a bit) and you'll see what I mean.
YNWA:
Thanks to you both. :)
One more thing, what is the difference between owner's capital & capital employed?
Alpha:
--- Quote from: Almostfreaking on May 23, 2010, 05:23:35 pm ---Thanks to you both. :)
One more thing, what is the difference between owner's capital & capital employed?
--- End quote ---
Owner's capital + Long Term Liabilities = Capital Employed.
holtadit:
When a LOAN is provided by a PARTNER :
we debit bank a/c
and CREDIT what ? the partner's current/capital account ?
PLEASE HELP !!!!!!!
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