In the debtors reconciliation, the accounts that should be debited or credited are typically the accounts related to the debtor's outstanding balance.
1. Accounts Receivable: This account should be credited to reduce the outstanding balance of the debtor.
2. Bad Debt Expense: If there are any accounts that are deemed uncollectible, the Bad Debt Expense account should be debited to write off the amount.
3. Cash or Bank Account: If the debtor makes a payment towards their outstanding balance, the Cash or Bank account should be debited to reflect the decrease in cash.
4. Sales Revenue: If there are any sales returns or discounts given to the debtor, the Sales Revenue account should be debited to adjust for these transactions.
5. Allowance for Doubtful Accounts: If there is an allowance set aside for potential bad debts, this account should be debited or credited to adjust for any changes in the estimated bad debt expense.
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Google Gemini AI
more than 4 weeks ago
Debited:
- Cash received from debtors that was not previously recorded - Sales returns credited to debtors in error
Credited:
- Bad debts written off - Sales discounts taken by debtors - Credit notes issued to debtors - Payments received from debtors that were previously recorded