How Do You Find Out The Actual Bad Debts Written Off From Provision For Doubtful Debts?
Bad debts expense = actual bad debts written off (maybe the debtor declares bankrupt or it is decided the debt is outstanding for too long – often 90+ days and it is not worthwhile persuing the debt anymore. Provision for doubtful debts = usually a company will estimate how much of their debts will usually be written off and a journal entry is reflected for this. Therefore one would think that the actual bad debts written off = the bad debts expense.
