The provision for bad debts has been made, and the accounting entries are as follows:

Debit: provision for bad debts?

Credit: accounts receivable

If There is no provision for bad debts and it is directly included in the calculation of "non-operating expenses"?

Debit: non-operating expenses?

Credit: accounts receivable

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Enterprises should set up the "Bad Debt Provision" accounting account to calculate the bad debt provisions drawn by the enterprise. Enterprises should conduct comprehensive inspections of receivables on a regular basis or at least at the end of each year, predict possible bad debts for various receivables, and make provision for bad debts for receivables that are not sure to be recovered.

The method of accruing bad debt provisions is determined by the enterprise itself. The enterprise shall list a catalog and specify the scope of provision for bad debts, extraction method, aging division and withdrawal proportion, and shall be approved by the shareholders' meeting or board of directors, or manager (factory director) meeting or similar organization in accordance with management authority, and Report to relevant parties for filing in accordance with laws and administrative regulations.

And keep it at the company's location for investors to check. Once the bad debt provision withdrawal method is determined, it cannot be changed at will. If changes are needed, the above procedures should still be followed, and after approval, the changes should be submitted to the relevant parties for filing, and explained in the notes to the accounting statements.

If the amount of bad debt provisions that should be withdrawn based on accounts receivable in the current period is greater than the credit balance of the "Bad Debt Provision" account, bad debt reserves should be withdrawn based on the difference; if the amount of bad debt reserves that should be withdrawn in the current period based on accounts receivable The credit balance that is less than the "bad debt provision" account should be offset against the accrued bad debt provision based on the difference.

If the amount of bad debt provision calculated based on accounts receivable in the current period is zero, the balance of the "Bad debt provision" account should be reversed in full. When an enterprise withdraws bad debt provisions, it debits the "Asset Impairment Loss" account and credits the "Bad Debt Provision" account. If the bad debt provision that should be withdrawn in the current period is greater than its book balance, the difference should be withdrawn.

If the amount due is less than the book balance, the "bad debt provision" account will be debited and the "asset impairment loss" account will be credited. For receivables that are truly irrecoverable, the enterprise will, upon approval, treat them as bad debt losses, write off the bad debt provisions drawn, debit the "Bad Debt Provision" account, and credit the "Accounts Receivable", "Other Receivables" and other accounts.

If the bad debt losses that have been confirmed and written off are recovered later, "Accounts Receivable", "Other Receivables" and other accounts will be debited based on the actual amount recovered, and "Bad Debt Provision" will be credited. "Account; at the same time, the "Bank Deposit" account is debited and "Accounts Receivable", "Other Receivable" and other accounts are credited. The ending credit balance of the "Bad Debt Provision" account reflects the bad debt provision that the company has withdrawn.

Baidu Encyclopedia-Bad debt provision