1.  We sell the goods on credit  Customers become debtors.  Some debtors may not be able to pay  When the business cannot collect back the money from the debtors, the debt is said to be 'bad'.  When the debt becomes bad, it has to be written off.

2.  debtors may not have paid up in full at the year end  Some them may pay up next year,  while some others may not pay at all.  The firm will know the amount of bad debts only in the following year.  So these debts are called doubtful debts  the accountant makes a provision for doubtful debts

3.  A debtor  whose account has been previously written off  may at a later time pay up the debt.  This is called recovery of bad debts.

4.  Q & A