Representation in Financial Statements Income Statement All bad debts charged as expenses: 15,000 + 35,000 = Rs. 50,000 (Taken from bad debts account) Provision for doubtful debts charged to expense account because of increase in provision: Rs. 4,000 (Taken from provision for doubtful debts account) Note: Provision for doubtful debts treated as ...If the total net sales for the period is $100,000, the company establishes an allowance for doubtful accounts for $3,000 while simultaneously reporting $3,000 in bad debt expense.
Bad debt debit : Debtors credit. Provision for bad debts debit : bad debts credit. 4.Bad debts are recorded in? Balance sheet. Profit & loss account. Cash flow statements. 5.Bad debts are recorded on which accounting principle: Going concern. Substance over form. Prudence concept. 6.Company decided to raise provision for bad debts from 3% to 5%.