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General Accounting Discussions: bad debt and cash accounting

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    I have a client that has a handyman business. His books are based on the cash method. He put in several weeks of work on a job but never got paid. Can this still be written off as bad debt on a cash method? Which accounts would be involved?
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    if your client uses the cash basis of accounting, there will be no entry to record the "write off" of receivable because whenever he received money from his customer, he'll just Dr. cash and Cr. revenue, therefore, revenue earned but not yet receive is ommited here.
    • CommentAuthordylangaine
    • CommentTimeMar 26th 2008
     
    he can't have bad debt if its cash accounting. in other words, he only records revenue when there's physical cash in hand. no money, no revenue.

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