Home| About Gina | Lower Your Property Taxes | Confidential Compensation | Tax Tips Articles | How to Read Financial Statements| Free Bookkeeping Tutorial
Previous Page Next Page Last page Table of Contents


If at the period-end, you have any doubts that you will be paid for a previous sale, a provision should be made for this amount.

A provision is an early recognition of a likely bad debt (an offset against customers receivables rather than completely removed). The entry is as follows:

As you can see, an expense is immediately recognized in the Profit & Loss account. The provision is an ongoing item in the Balance Sheet. An example account:

Provision for Bad Debts





Your privacy is important to me. Please read my privacy statement, disclaimer and Guarantee.
All contents of this web site copyright 2006 through 2010 Gina L. Gwozdz, CPA. All rights reserved.
This page is copy protected against web site content infringement plagiarism will be detected.
Last modified: May 29, 2008