How does an over provision for bad debts reflect in an income statement and in a statement of financial position?

Question added by Sharlon Moraa
Date Posted: 2017/10/01

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by AIZAD ASJAD MALIK MALIK , Assistant Manager- Receivables , Lamprell Energy Limited

Well, different accountants use provision for doubtful debts in different ways.

1- Provision for doubtful debt is a contra asset account reported on balancesheet.

2- Some accountants use Provision for Doubtful debts to mean the expense reported on the income statement.

How are the income statement and balance sheet linked?
Top Answer: I think the answer is D. Net income from the income statement transfers to the balance sheet equity secti ... See More

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Statement of financial position is also know as?
Top Answer: Answer is Option1. Balance Sheet. See More

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What is the difference between bad debt and doubtful debt?
Top Answer: A bad debt is an account receivable that has been clearly identified as not being collectible. This means ... See More

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The purpose of the income statement is to show the:
Top Answer: <p>D. It shows the net profit or loss over the period</p> See More

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