Accountancy Forum

hi...i need to ask one thing abt provisions..

there are two methods of doing questions..

1- we open separate accounts for "provision of doubtful debts" and for "bad debts".......we transfer the balance from both to P&L separately.

2-we open account for "prov. for doubt.. debts".....we transfer the bad debts to this account and then transfer the balance to P&L....

i have seen both the methods ..and in frankwood only the first method is mentioned.........but when i see solved past papers...in all those the second method has been used.....my cousin in mod.E also told me that second method is better...

what do u guyz suggest?? is the first one ok or not?

oh sab icap ke wakeelo....kidher gai???
you ppl talk so much abt general topics like you are so much experts and stuff.........why can't you answer my question.....can't u do any thing actual instead of talking uselessly???

There is even one more method. As in first case we here also open 2 accounts 1 for provision of doubtful debts and the other for "bad debts" . But the entries are vice verca, we transfer the balance from Provison accounts to Bad Debts account and then by an adjusting entry to P/l a/c.

Each method is acceptable. I have always used this 3rd method.

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our teacher uses this third method.....but i don't like it(personal matter)......i didn't see this any book also.........

hi

well i m not belong to icap ( not icap wakeel) but as business gradute i took several courses related to accouting n adv. accounting... and we always follow the 2nd method... well might be the reason is that both are the provision so we take both in same account

any further opinions n reason will b appreciated.

regard,,,,
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eShA


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