Category: Debtor

What is a provision for Bad Debts?

Provision for Bad Debts  100% of debtors are unlikely to pay the amount owed to the business. A % will not be collected/received Provision for Bad debts is an estimate of the debts that will not be paid in the financial year Estimate based upon historic info,  debtors analysis and trends

Read More »

What is a Bad Debt?

Bad Debt  Bad debt is amount owed to the business, that will not be collected/received Bad debt is shown under Expenses in the Income Statement Bad debt will reduce Debtors in the Balance Sheet

Read More »

What is the Debtor Schedule?

Debtor Schedule Debtor schedule usually prepared with the cash budget Debtor schedule shows R to be collected from debtors over the budgeted period Debtor schedule used for planning, budgeting and cash flow management

Read More »

What is the Debtor collection period?

Debtor Collection Period Collection Period = Debtors/Credit sales * 365 = number of days It shows the number of days from the sale until cash is received by the business The higher the number, the longer debtors are taking to pay the business

Read More »
Scroll to Top
Skip to content