Allowance for credit losses adjustment

Video Overview

In this tutorial we will be discussing the allowance for credit losses (provision for bad debts). Credit losses are also known as bad debts. A credit loss occurs when a business has made a sale on credit in the past and then finds itself being unable to collect the money owed from the debtor for this sale. The business must now write off the debtor as a bad debt or credit loss. The entry required for actual bad debts vs the entry required to create or adjust a porvision for bad debts are quite different. This tutorial will outline these differences.

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