How are provision for doubtful debts treated in trial balance? Considering prevailing economic conditions and forecasting future trends empowers businesses to adjust their provisions for doubtful debts accordingly. The organization should make this entry in the same period when it bills a customer, so that revenues are matched with all applicable expenses (as per the … [Read more…]

When dividends are paid out, they reduce the retained earnings balance. By analyzing the T account for dividends, we can track the outflow of funds from retained earnings to shareholders. T accounts are a visual representation of the double-entry bookkeeping system, which is used to record and track financial transactions. They are called T accounts … [Read more…]

Government grants may also be set up as deferred income in which case the difference between the deferred income and its tax base of nil is a deductible temporary difference. Whichever method of presentation an entity adopts, the entity does not recognise the resulting deferred tax asset, for the reason given in paragraph 22. If tax … [Read more…]