Bad debt provision refers to the accounts receivable of the enterprise, which is an allowance account. Under the allowance method, enterprises should estimate the loss of bad debts at the end of each period and set up a "bad debt reserve" account.
Accounting treatment is as follows:
1. When the enterprise withdraws the bad debt reserve, it debits the account of "asset impairment loss-bad debt reserve"; Credit the bad debt reserve account.
(1) If the amount of bad debt provision to be accrued in this period is greater than the book balance of bad debt provision, it shall be accrued according to the difference? Debit the "asset impairment loss-bad debt reserve" account; Credit the bad debt reserve account.
(2) If the amount of bad debt provision is less than the book balance of bad debt provision, make an opposite accounting entry according to the difference and debit the account of bad debt provision; Credit the "asset impairment loss-bad debt provision" account.
2. Unrecoverable accounts receivable shall be treated as bad debts after being approved according to the management authority, and the accounts receivable shall be written off and debited to the subject of "bad debt reserve"; Credit accounts such as notes receivable, accounts receivable, prepayments, other receivables and long-term receivables.