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Bad Debts Methods

Master bad debts methods with FREE poster for studying

Customers of a business do not always pay for the goods and services that they receive. This poster on bad debts methods will help you to learn how to deal with these customers in accounting.

When they owe money, you record them in an Accounts Receivable account which is an asset. When you write off the debt as bad, you record them in a Bad Debts account which is an expense.

To calculate the bad debts figure, you must know the bad debts methods. Your teacher, examiner or accountant may instruct you to use one of the bad debts methods and expect you to know what each one entails.

Two common bad debts methods

Direct write-off method

The direct write-off method means that the debt is written off directly in the ledger and does not appear in the Balance Sheet.

Allowance method

The allowance method means that a provision for doubtful debts is created and is shown in the Balance Sheet as a deduction from Accounts receivable.

This FREE poster helps you to learn bad debts methods quickly so that you can spend your study time learning the difficult topics. This poster prepares you to do homework better, pass exams or do basic accounting for a small business.

How to learn bad debts methods with this FREE poster

When you download this FREE poster to learn bad debts methods, you can print the document on paper size 8.5×11 inches, landscape orientation.

Print and stick the poster on the wall of your study area to learn bad debts methods.

Whenever you are doing an accounting question, make sure to look up and check your poster for guidance.

Eventually, you would not have to look at the poster again because you would learn the bad debts methods so well that the information would be stuck in your memories.

Download FREE poster and learn bad debts methods

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