Using the policies and procedures for Gold Catering:

1. Explain the different procedures involved in recording bad debts and doubtful debts:
2. Why is there a difference between bad debt and doubtful debt?

How does this affect the reporting of assets?

Transcribed Image Text:

Bad and Doubtful Debts Bad Debts are those that are unable to be collected due to bankruptcy or debtor being untraceable. The write-off of the outstanding debt is to be approved by S Golden. Upon approval the bad debit is to be written off to the Bad Debts expense account. A Doubtful Debt Provision of 2% of Accounts Receivable as at 30 Jun is to be raised in the accounts. Bad and Doubtful Debts Bad Debts are those that are unable to be collected due to bankruptcy or debtor being untraceable. The write-off of the outstanding debt is to be approved by S Golden. Upon approval the bad debit is to be written off to the Bad Debts expense account. A Doubtful Debt Provision of 2% of Accounts Receivable as at 30 Jun is to be raised in the accounts.

Answer rating: 100% (QA)

Recording Bad Debts and Doubtful Debts involves distinct procedures within Gold Caterings policies a... View the full answer