Doubtful Accounts

alexisandme7 · #1 Feb 25, 2008, 11:52 PM

What effect does lowering the estimate for doubtful accounts have on the income statement and balance sheet?

Gekko · Feb 26, 2008, 12:55 AM

Lowering your provision i.e. Reversing some of your previous Doubtful Debt estimate, will Increase your Income for the period CR Doubtful Debt reclaim (Or something like that), and it will reduce your CR Provision

Before
Debtor 100
Provision Doubt Debt (40)
Accum Profit (60)

After
Debtor 100
Provision Doubt Debt (20)
Income (20)
Accum Profit (60)



At Ask Me Help Desk you can ask questions in any topic and have them answered for free by our experts. To ask questions or participate in answering them you must register for a free account. By registering you will be able to: Get free answers from experts in any of our 300+ topics. Accept money for answers that you provide. Communicate privately with other members (PM). See fewer ads. Sign Up!