What Is A Debit Balance In The Allowance For Doubtful Accounts (AFDA)
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Can Allowance For Doubtful Accounts Be Negative? Here we discuss about “What is a Debit Balance in the Allowance for Doubtful Accounts”. If you don’t study my previous article about Adjustments in Final Accounts , then kindly read it out because without knowing the introduction about Doubtful Debt Account , you can not understand this particular topic. Allowance For Doubtful Accounts have debit balance (which is A n U nfavora ble or A Negative Balance) because the amount of Actual Bad Debts Writte n Off is greater than the Provision For Doubtful Debts / Allowance for Doubtful Accounts . For Example, the accounts receivable for the Previous Accounting Year was Rs.70000 and there was a provision for doubtful debts of 2% on Accounts Receivable while the Actual Bad Debts Written off in the Current Accounting Period is Rs. 5400, so now we need to adjust the Balance in Allowance For Doubtful Accounts. At The Previo...