{"id":5019,"date":"2014-08-20T05:54:17","date_gmt":"2014-08-20T03:54:17","guid":{"rendered":"http:\/\/www.officetodo.com\/public\/?p=5019"},"modified":"2014-08-17T05:54:50","modified_gmt":"2014-08-17T03:54:50","slug":"recognising-a-receivable-write-down","status":"publish","type":"post","link":"http:\/\/www.officetodo.com\/public\/recognising-a-receivable-write-down\/","title":{"rendered":"Recognising a receivable write-down"},"content":{"rendered":"

Sometimes it happens so that you are unable to collect the receivable and as it happens, you should consider writing it down. Whenever your client has financial difficulties, it\u2019s one of the conditions that should make you doubt the ability of the customer to actually pay up what they owe.\u00a0<\/p>\n

\u201cWriting down\u201d means that you will still keep the receivable on the balance sheet just that it\u2019s written down on another account effectively giving an effect of say a zero receivable for the specific client. Say you\u2019d have a receivable in the amount of 500 and you have doubts about this being collectible. So you decide to write it down. You will keep the receivable on the ledger, but add a negative account called for an example \u201cAllowance for doubtful receivables\u201d for the amount of the receivable itself, 500.<\/p>\n\n\n\n\n\n
#<\/strong><\/td>\nDebit-Credit<\/strong><\/td>\nAccount name<\/strong><\/td>\nAmount<\/strong><\/td>\n<\/tr>\n
1<\/em><\/td>\nDebit<\/em><\/td>\nReceivables write-down expense account<\/em><\/td>\n500<\/em><\/td>\n<\/tr>\n
\u00a0<\/em><\/td>\nCredit<\/em><\/td>\nAllowance for doubtful receivables<\/em><\/td>\n500<\/em><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

 <\/p>\n

Effectively to write off a receivable from the balance sheet, you\u2019d apply the same entry only that you\u2019d do it in a full amount the receivable is recognized in and take it off from the receivables ledger as well.<\/p>\n","protected":false},"excerpt":{"rendered":"

Sometimes it happens so that you are unable to collect the receivable and as it happens, you should consider writing it down. Whenever your client has financial difficulties, it\u2019s one of the conditions that should make you doubt the ability of the customer to actually pay up what they owe.\u00a0<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[35],"tags":[],"class_list":["post-5019","post","type-post","status-publish","format-standard","hentry","category-1-7-basic-entries"],"aioseo_notices":[],"_links":{"self":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/5019","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/comments?post=5019"}],"version-history":[{"count":1,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/5019\/revisions"}],"predecessor-version":[{"id":5020,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/5019\/revisions\/5020"}],"wp:attachment":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/media?parent=5019"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/categories?post=5019"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/tags?post=5019"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}