Provision For Bad Debts

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Please Ask Provision for Bad Debts is Allowed expense in Income tax View ?/

AI Summary

Provisions for Bad Debts Confirmed as Deductible Expenses Under Income Tax Laws; Accounting Treatment Clarified. A forum discussion addressed whether provisions for bad debts are allowable as expenses under income tax laws. One participant believed it is eligible for deduction and invited expert opinions. Another confirmed it is allowed as an expenditure. A third participant expressed gratitude for the insights gained on income tax and accounting. The final contributor agreed that the provision is allowed as an expense but clarified the accounting treatment, involving a debit to the bad debt expense account and a credit to the provision for doubtful debts account.