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General Accounting Discussions: Allowance for Doubtful Accounts - Debit Balance?

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    • CommentAuthorchenhsi
    • CommentTimeDec 26th 2009
     
    On part 3 of the Accounts Receivable/Bad Debts Expense topic, it says that Allowance for Doubtful Accounts must have a credit or a zero balance.

    Is it not possible for it to have a debit balance, if there is a large unanticipated number of bad debts during a period?
    • CommentAuthorpk
    • CommentTimeDec 27th 2009
     
    The balance in the bad debt provision account will either have a zero or credit balance.
    If you have a large amount of unanticipated bad debts, then you should only charge the bad debt to the extend of available balance in the provision account and the rest you should charge to the bad debt expense account directly.
  3.  
    PK you are right buddy!
    God work

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