What is a Credit Balance In Allowance For Doubtful Accounts
Here we will study about Allowance For Doubtful Accounts Credit Balance. Previously, we studied about “ Allowance For Doubtful Accounts Debit Balance ”. Allowance For Doubtful Accounts have Credit balance because the amount of Actual Bad Debts Writte n Off is less than the Provision For Doubtful Debts / Allowance for Doubtful Accounts or the amount estimated for bad debts is more than the actual amount received from our customers. So, We Get Credit Balance For Allowance For Doubtful Accounts as a result of lesser amount of actual Bad Debts than the Provision For Doubtful Debts / Allowance for Doubt Accounts. Considering Our Example in the Previous Article, " What is a Debit Balance In Allowance For Doubtful Accounts ", We make some changes in this example to understand this topic. For Example, the account receivable for the Previous Accounting Year was Rs.70000 and there was a provision for doubtful debts of 2% on Accounts Receivable ...