How To Deal With Provision For Bad Debts. By watching this video you will be shown how. You can do this via a journal entry that debits the.
A loan loss provision is defined as an expense set aside by a company as an allowance for any unpaid debt meaning loan repayments that are due and are not paid for by a borrower. A bad debt can be written off using either the direct write off method or the provision method. That gives you a more realistic picture of your business's income than assuming every receivable will be paid in full.
