What is the difference between bad debt and doubtful debt?
![What is the difference between bad debt and doubtful debt? Bad debt (Bad Deb) is the failure to receive payment from the debtor who collects until the end. until it is written off from the account Doubtful accounts are debtors who are unable to pay their debts in installments. Considered as the cost of that accounting period. but not expenses according to the Revenue Code allowance for bad debts or allowance for doubtful accounts (Allowance for Doubtful Accounts) is to collect money in advance for protection and guarantee that The debtor is unable to pay the debt in the next installment. can be used as a deduction item from the accounts receivable on the balance sheet There are two methods of accounting for bad debts as follows: - Direct amortization method It's an easy way to save. Will record only when bad debts are incurred by bringing Debit - Bad Debt XX Credit - Debtor XX - how to set an allowance can be calculated from the percentage of sales or calculated from the percentage of the outstanding balance If the debtor has the original balance be deducted from the calculated amount. or calculate to make the balance as close to the truth as possible by bringing Debit - doubtful accounts XX Credit - Allowance for Doubtful Accounts XX In the event that the debtor fails to pay or unable to collect money from the debtor, bring Debit - allowance for doubtful accounts XX Credit - Debtor XX Bad debt received is the payment system from debtors who have already written off bad debt, which can be divided into 2 cases as follows Scenario 1: In case of actual bad debt write-off to create a new debtor, record it by bringing Debit - Debtor XX Credit - bad debt recovered XX Debit - Cash XX Credit - Debtor XX Case 2 In the case of setting up an allowance for bad debts to create a new debtor and reduce the allowance for doubtful accounts can be recorded by bringing Debit - Debtor XX Credit - Allowance for Doubtful Accounts XX Debit - Cash XX Credit - Debtor XX ------------------------------------------------------------------------------------- Interested in online marketing care services | online marketing | complete graphics | can contact us anytime | brand building | online marketing | online marketing plan | brand building | Facebook fan page care | Take care of LINE OA. You can contact us 24 hours a day. Details of online marketing services >> https://www.chatstickmarket.com/langran Examples of various brands that we take care of online marketing >>https://www.chatstickmarket.com/portfolio --------------------------------------------------------------------------------------- 💙 Consult our team 💙 📱Tel : 0840104252 📱0947805680 Office Hotline : 034-900-165 , 02-297-0811 (Monday-Friday) 📨 Inbox : http://m.me/ChatStick.TH ┏━━━━━━━━━┓ 📲 LINE: @chatstick ┗━━━━━━━━━┛ or click https://goo.gl/KuzCpM 🎉 details at http://www.chatstickmarket.com/langran 🎉 See our work at https://www.chatstickmarket.com/portfolio](https://static.wixstatic.com/media/78e300_519b0d5bedd14f5796745880c467cd69~mv2.png/v1/fill/w_980,h_980,al_c,q_90,usm_0.66_1.00_0.01,enc_auto/78e300_519b0d5bedd14f5796745880c467cd69~mv2.png)
What is the difference between bad debt and doubtful debt?
Bad debt (Bad Deb) is the failure to receive payment from the debtor who collects until the end. until it is written off from the account
Doubtful accounts are debtors who are unable to pay their debts in installments. Considered as the cost of that accounting period. but not expenses according to the Revenue Code
allowance for bad debts or allowance for doubtful accounts (Allowance for Doubtful Accounts) is to collect money in advance for protection and guarantee that The debtor is unable to pay the debt in the next installment. can be used as a deduction item from the accounts receivable on the balance sheet
There are two methods of accounting for bad debts as follows:
- Direct amortization method It's an easy way to save. Will record only when bad debts are incurred by bringing
Debit - Bad Debt XX
Credit - Debtor XX
- how to set an allowance can be calculated from the percentage of sales or calculated from the percentage of the outstanding balance If the debtor has the original balance be deducted from the calculated amount. or calculate to make the balance as close to the truth as possible by bringing
Debit - doubtful accounts XX
Credit - Allowance for Doubtful Accounts XX
In the event that the debtor fails to pay or unable to collect money from the debtor, bring
Debit - allowance for doubtful accounts XX
Credit - Debtor XX
Bad debt received is the payment system from debtors who have already written off bad debt, which can be divided into 2 cases as follows
Scenario 1: In case of actual bad debt write-off to create a new debtor, record it by bringing
Debit - Debtor XX
Credit - bad debt recovered XX
Debit - Cash XX
Credit - Debtor XX
Case 2 In the case of setting up an allowance for bad debts to create a new debtor and reduce the allowance for doubtful accounts can be recorded by bringing
Debit - Debtor XX
Credit - Allowance for Doubtful Accounts XX
Debit - Cash XX
Credit - Debtor XX
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Interested in online marketing care services | online marketing | complete graphics | can contact us anytime | brand building | online marketing | online marketing plan | brand building | Facebook fan page care | Take care of LINE OA. You can contact us 24 hours a day.
Details of online marketing services
Examples of various brands that we take care of online marketing
---------------------------------------------------------------------------------------
💙 Consult our team 💙
📱Tel : 0840104252 📱0947805680
Office Hotline : 034-900-165 , 02-297-0811 (Monday-Friday)
📨 Inbox : http://m.me/ChatStick.TH
┏━━━━━━━━━┓
📲 LINE: @chatstick
┗━━━━━━━━━┛
or click https://goo.gl/KuzCpM
🎉 details at http://www.chatstickmarket.com/langran
🎉 See our work at https://www.chatstickmarket.com/portfolio
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