Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 46 - No. 34)
The journal entry to record a provision for doubtful debts would involve:
Debit Allowance for Doubtful Debts, Credit Accounts Receivable
Debit Bad Debt Expense, Credit Allowance for Doubtful Debts
Debit Accounts Receivable, Credit Allowance for Doubtful Debts
Debit Allowance for Doubtful Debts, Credit Bad Debt Expense
Explanation
The entry reflects the recognition of the anticipated loss from uncollectible receivables. Bad debt expense increases, and the allowance for doubtful debts (a contra-asset account) increases.
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