How to write off bad credit
Wouter van Marle
wouter at squirrel-systems.com
Thu Jan 15 20:50:43 EST 2009
On 16 Jan 09, at 9:18, Cam Ellison wrote:
> Bob Taylor wrote:
>> IANAA also. However, I did take an accounting class many many years
>> Since bad debts hasn't changed since then, create an expense account
>> called, you guessed it, Bad Debts. I would, offhand, credit Bad Debts
>> and debit the A/P account for this business. I would hope the U.S. IRS
>> still allows these to be deductible!
> Aye. This isn't a debt, though - it's on the A/P side. I think he
> actually needs to go through the process: it's not a regular
> where you can simply transfer it from one account to another. I think
> he tried to do that, but it did not clear the payment from the A/P
> register. That is, it still shows up in reports.
Exactly... and there is the core of the problems. To clear the report I
basically need to enter a negative amount, and write that off to an
Closely related: I have another customer who had a claim against me
(material supplied and paid for, but after arrival quality was poor so
I have to give them some refund). In this case I have to make actual
cash payments, even more reason to have them in the customer reports,
so I can keep track on how muhc I owe them!
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