What is Bad debts ? Give the Adjusting Entry for it.

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Q. What is Bad debts ? Give the Adjusting Entry for it.

Tamil Nadu DgeTamil Nadu HSC First Year (DGE) Commerce Board 2024Subjective· 3mImportance★★★★★

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Bad debts are irrecoverable amounts owed by debtors; they are written off by debiting Bad Debts A/c and crediting Sundry Debtors A/c (and ultimately charged to the Profit and Loss Account).

Meaning: When a debtor fails to pay the amount due — because of insolvency or other reasons — the amount becomes irrecoverable. Such an irrecoverable amount is called bad debts and is a loss to the business.

Adjusting entry (to write off further bad debts):

Particulars	Debit (Rs.)	Credit (Rs.)
Bad Debts A/c Dr	xxx
To Sundry Debtors A/c		xxx
(Being further bad debts written off)
…

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Same / Similar Concept — real previous-year questions on the same or a closely similar concept, not this exact question.

CBSE 2025Set MARCH1 markMCQ
$Q. If there is no existing provision for Doubtful debts, provision created for Doubtful debts is :$
(a) Credited to Bad debts account
(b) Debited to Bad debts account
(c) Debited to Profit and Loss account
(d) Debited to Sundry debtors account
›Reveal solutionSolution
With no existing provision, the full amount of a newly created provision for doubtful debts is debited to the Profit and Loss account, so the correct answer is option (c).

A provision for doubtful debts is an estimated loss on debtors. Creating it involves two effects:

The amount is debited to the Profit and Loss account (charged against profit as an anticipated loss), and

The Provision for Doubtful Debts account is credited (shown as a deduction from Sundry Debtors in the Balance Sheet). …
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CBSE 2024Set MARCH1 markMCQ
$Q. If there is no existing provision for doubtful debts, provision created for doubtful debts is ______.$
(a) Credited to Bad debts account
(b) Debited to Bad debts account
(c) Debited to Profit and Loss account
(d) Debited to Sundry debtors account
›Reveal solutionSolution

With no old provision, the whole provision for doubtful debts is debited to the Profit and Loss account.

A provision for doubtful debts is an estimated amount set aside for debtors who may fail to pay. Following the prudence (conservatism) concept, anticipated losses are provided for in advance.

When there is no existing (opening) provision, the entire provision created is treated as a fresh charge against the year's profit:

Particulars Debit Credit
Profit and Loss A/c Dr.
To Provision for Doubtful Debts A/c Cr.
…

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Particulars	Debit	Credit
Profit and Loss A/c	Dr.
To Provision for Doubtful Debts A/c		Cr.
…

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Q.What is Bad debts ? Give the Adjusting Entry for it.

Concept understanding — Bad Debts and Provisions on Debtors

Q.What is Bad debts ? Give the Adjusting Entry for it.

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