Bad Debts
Bad Debts amount to that portion of the debts which are either irrecoverable or whose probability of recovery is very rare.
Bad Debt Account (Debit), Debtor’s Account (Credit)
Provision For Doubtful Debts
Provision for bad debts is the estimated percentage of total doubtful debt that needs to be written off during the next year. The debtor’s account, whose debt is recognized as doubtful, is never closed/written off. The provision for bad debts and the debt continue to be reflected separately. Entry is same as Bad Debts
