Provision for doubtful debts
GKTAX
Member Posts: 7
There is no provision to group provision for doubtful debts as negative balance under assets group.
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GKTAX
Member Posts: 7
There is no provision to group provision for doubtful debts as negative balance under assets group.
Comments
Hey @GKTAX! Can you elaborate on what that would look like, ideally? I'm not sure I entirely follow - what would this account typically be used for?
this accounted is credited while the expense account is debited for the bad debts expenses. While the receivable balances remain as same, this account shows the corresponding provision created in the current or previous year. This amount is netted off against receivables in the financial statements presentation. For example, the total receivable is 100k out of which 15k is considered doubtful of recovery, an amount of 15k is debited to the expense account and credit goes to this account, In the financial statements the total receivables (100k) less the credit balance in this account (15k) is shown as receivables (85k).
Hi @GKTAX , thanks for adding some more context here. Am I right in thinking that you're referring to how writing off bad debt appears in your Profit & Loss statement in Wave? If so, it is true that the accounting equation at the top will always show the net profit, after expenses (such as bad debt). If you want to see only your gross income, you can click the Details section of the report and look at the gross income section only. As well, if you want to see your income on a real-payment only basis, you can change the report type to Cash Basis (it automatically is set to Accrual Basis).