Since there is a possibility that the receivables (hereinafter referred to as "accounts receivable") may not be recovered, it is necessary to conduct a credit impairment test and make corresponding impairment provisions according to the results of the impairment tests, that is, to recognize the "bad debt provisions". The amount of "bad debt provision" recognized in the current period is not based on credit salesBalance(Generally refers to the balance of "accounts receivable") Provision for bad debtsProportionsIt is calculated directly, but it is necessary to consider the existing balance of "bad debt provision" (which may be a debit balance or a credit balance) before the amount of "bad debt provision" to be recognized in the current period (the amount that needs to be measured when making accounting entries). Specifically, it is based on the current "accounts receivable".BalanceThe "bad debt provision" that should be accruedBalanceAfter the calculation is made, againWrite-off"Bad debt provision".ExistingThe amount obtained after the balance (if it is a credit balance, it decreases, if it is a debit balance, it increases), is required when the accounting treatment is carried out in the current year, that is, when the accounting entries are prepared: the "credit impairment loss" is debited and the "bad debt provision" (which may also be reversed).MeasuredAmount.
The fundamental reason for accounting according to the above method is to followProportioning principle, that is, at the end of each period, the "accounts receivable" should be put inBalanceand "bad debt provisions".BalanceMaintain at a certain levelProportionsrelationship, and this proportion is estimated based on the previous experience of the enterprise or the experience of the industry. The reason for maintaining a certain percentage relationship is that as long as it is receivable, there will always be a possibility that it cannot be recovered, or the proportion of 5% cannot be recovered, or the proportion of 10% cannot be recovered, etc., in short, there will be a certain amountProportionsof bad debts, it is necessary to make a provision for "bad debts". "Accounts receivable" is the cause, "bad debt provision" is the effect, there is a cause and there must be an effect, but it is not known which accounts receivable will become bad debts and cannot be recovered, or only a part of the accounts receivable will be recovered, therefore, the enterprise can only rely on oneTotalThe balance of "accounts receivable", as well as a certain proportional relationship to deduce the balance of bad debts, this amount is estimated. Although it is an estimate, one thing is very clear, that is, the more balances of "accounts receivable", the greater the balance of "bad debt provisions", and conversely, the smaller the balance of "accounts receivable", the smaller the balance of "bad debt provisions". The balance of "Accounts Receivable" will follow the original "Accounts Receivable".Take it backAnd constantly decreasing, whileNew on creditTheoretically, because the balance of "bad debt provision" and the balance of "accounts receivable" need to maintain a certain proportional relationship, the balance of "bad debt provision" also needs to change constantly, but for the sake of simplification, we only inEnd of periodIf the balance of the "bad debt provision" at the end of the period is not proportional to the balance of the "accounts receivable", then adjust the balance of the "bad debt provision" (adjusted by increasing or decreasing) so that the two maintain this at all timesProportionsRelationship. Since it is to be adjusted, it is necessary to consider the existing balance of "bad debt provision", the existing balance is insufficient, the existing balance is increased, and the existing balance is reduced, similar to the way of more refund and less compensation, so that the two can achieve this pre-set proportional relationship.
Example 1: A has no accounts receivable at the beginning of the first year, and the balance of "accounts receivable" at the end of the first year is 1 million yuan, according toThe proportion of provision for bad debts. In June of the second year, Company B went bankrupt, and all the 30,000 yuan receivable from Company B could not be recovered, and the balance of "accounts receivable" at the end of the second year was 2 million yuan.
Provision for bad debts at the end of the first year:
Debit: Credit impairment loss 10
Credit: Provision for bad debts 10
Interpretation: The balance of "accounts receivable" in the first year is 1 million yuan, according to the proportion of 10%, the balance of "bad debt provision" should be 100 10% = 100,000 yuan, because there is no accounts receivable at the beginning of the period, there must be no "bad debt provision", so the balance of "bad debt provision" at the beginning of the period is 0, therefore, the "bad debt provision" (occurrence amount) that should be confirmed in the first year = the balance of 10 opening balance 0 = 100,000 yuan. After the preparation of accounting entries, the credit balance of "bad debt provision" is 100,000 yuan, which maintains a 10% proportional relationship with the debit balance of "accounts receivable" of 1 million yuan, which follows the principle of proportionality, reflecting the significance of the more "accounts receivable" and the more "bad debt provisions".
Year 2: In June of the second year, the loss of bad debts of 30,000 yuan was recognized.
Debit: Bad Debt Provision 3
Credit: Accounts receivable 3
Interpretation: The 30,000 yuan receivable from Company B cannot be recovered due to the bankruptcy of Company B and needs to be written off, and the decrease in accounts receivable is credited. At the same time, since the main function of "bad debt provision" is to offset the "accounts receivable" when the "accounts receivable" cannot be recovered, the debit side is included in the "bad debt provision" of 30,000 yuan at the same time as the credit is credited to the "accounts receivable". After the preparation of this accounting entry, the credit balance of "bad debt provision" is only 10 3 = 70,000 yuan, which is likely to be less than 10% of the balance of "accounts receivable" at that time, but because it is in the middle of the period, not the end of the period, therefore, there is no need to adjust the provision for "bad debts".
Provision for bad debts is made at the end of the second year.
Debit: Credit impairment loss 13
Credit: Provision for bad debts 13
Interpretation: The balance of "accounts receivable" in the second year is 2 million yuan, according to the proportion of 10%, the balance of "bad debt provision" should be 200 10% = 200,000 yuan, because the balance of "bad debt provision" is 70,000 yuan at this time, therefore, the "bad debt provision" (occurrence amount) that should be recognized at the end of the second year =There should beBalance 20Existing balance10,000 yuan After the accounting entries are prepared, the credit balance of "bad debt provision" is 200,000 yuan (.).It maintains a 10% proportional relationship with the debit balance of 2 million yuan of "accounts receivable", follows the principle of proportionality, and reflects the significance of the more "accounts receivable" and the more "bad debt provisions".
Example 2: A makes provision for bad debts according to 10%, and has a balance of 2 million yuan in "accounts receivable" and a balance of 200,000 yuan in "bad debt provision" at the beginning of the first year. In June of the first year, it received 30,000 yuan of "accounts receivable" that had been written off as bad debts. At the end of the first year, the balance of "accounts receivable" was 1 million yuan, and the relevant accounting treatment was requested.
June of the first year.
Debit: Accounts receivable 3
Credit: Bad Debt Provision 3
Borrow: Bank Deposit 3
Credit: Accounts receivable 3
Interpretation: Must be done when receiving accounts receivable that were previously written off as bad debtsTwo strokesThe first accounting entry is the opposite of the original reversal (when the original bad debt loss is written off against the accounts receivable, the "bad debt provision" is debited and the "accounts receivable" is credited), the purpose of this is to restore the credit of the original debtor, and after the reverse reversal, it means that the bad debt loss is not treated, so there is no record that affects its credit loss. The second accounting entry is treated as a normal recovery of "accounts receivable". At this time, the credit balance of "bad debt provision" = 20 + 3 = 230,000 yuan at the beginning of the period.
At the end of the first year. Borrow:Provision for bad debts 13
Credit: Credit impairment loss 13
Interpretation: The balance of "accounts receivable" in the second year is 1 million yuan, according to the proportion of 10%, the balance of "bad debt provision" should be 100 10% = 100,000 yuan, because the balance of "bad debt provision" is 230,000 yuan at this time, therefore, the "bad debt provision" (amount) that should be recognized at the end of the second year =There should beBalance 10Existing balance10,000 yuan, because it is a negative number, is included in the "bad debt provision" accountDebit。After the accounting entries are prepared, the credit balance of "bad debt provision" is 100,000 yuan (It maintains a 10% proportional relationship with the debit balance of 1 million yuan of "accounts receivable", follows the principle of proportionality, and reflects the significance of the less "accounts receivable" and the less "bad debt provision".