Bad debt and Provision for doubtful debt

Bad debt & Provision for doubtful debt
Dr: Bad debt xx
Cr: Debtors xx
Bad debt :
Bad debts:
Net profit will decrease as expense increases. Net debtor
decreases as there is a decrease of the amount of debts that
are unrecoverable.
Effect of bad debts, recovery of bad debts and provision on
doubtful debts on net profit and net debtors in the Balance
Sheet:
The allowance for doubtful debt reduces the recievable
balance to the amount that the entity prudently estimates
to recover in the future.
Why do we need to have provision for
doubtful debt?
Bad debt is an account receivable that has been clearly
identified as not being collectible. Doubtful debt is an account
receivable that might become a bad debt at some point in the
future.
Difference between bad debts and
doubtful debts:
Fraud
Trade dispute
Cr: Balance sheet xx
Doubtful debt:
Dr: Doubtful debt xx
Customers going bankrupt
Reasons for incurring bad debts:
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