How is bad debts recovered accounted in revaluation account and balance sheet while admission of a partner.

Dear Student 


Bad Debts recovered are the Gains for the organisation. During the admission of any partner, as all the Reserves and Accumulated profits , Gains and Losses are transferred to revaluation A/c  , Bad debts recovered account is also transferred to revaluation account . Therefore this account does not appear in balance sheet apart from the cash that is added due to recovery of Bad debts .

Following journal entry would help you to understand better:
Cash A/c Dr. XXX  
   To Bad Debts Recovered A/c     XXX
(Being bad debts recovered)      
       
Bad debts Recovered A/c Dr. XXX  
  To Revaluation A/c     XXX
(Being Bad debts recovered account closed in Revaluation A/c)      
 
Regards

 

  • 21
It will be credited to revaluation a/c as it is gain for the firm.
  • 18
Sonal posted write but also add to cash/bank in balance sheet
  • 4
Rght hunny! :)
  • -4
Since bad debts recovered is a reduction in liability for the firm, the entry will be

Liability a/c            Dr
To  Revaluation a/c

Thus, it will be appear on credit side on the revaluation a/c
  • 2
IF BAD DEBTS EXCEEDS PROVISION  DOUBTFUL DEBTS.THEN THE EXTRA AMOUNT IS DEBITED IN REVALUATION AC .AND ITS IS DEDUCTED FROM DEBTORS IN BALANCE SHEET
  • 7
It is credited in revaluation account as a gain and the debtors amount in the balance sheet will increase or the provision for bad debts will reduce.
 
  • -7
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