What is the difference between Bad debts and bad & doubtful debts. What are the legal compliances for the provisions for doubtful debts and bad debts recovered after being written off. 

There are four category for the determination of NPA in banking and there is mentioned that if any amount which is unpaid to us than that becomes bad bedts I.e. any amount from Mr x is pending and he denied on the payment than it becomes bad debts and when we have uncertainty about the receipt than it becomes bad and doubtful debts. read less

Bad debts are the one which r irrecoverable however bad and doubtful debts are one which has the probability of being recovered in the future...however the uncertainty still exists...bad debts is considered to be indirectly effecting the operations therefore is been debited to p&l statement however doubtful debts are still effecting sundry debtors therefore would be deducted from gross figure of debtors...I hope the answer is going to be helpful read less

Bad debts Irrecoverable debts because of insolvency. Debit (Dr.) in P&L Account as it a loss. On recovery to be credited in P&L account in Financial year it has been recovered. Doubtful Debts Debtors where there is uncertainity about their payment. Provision is created for doubtful debts which is subtracted from debtors and debited to P&L account. read less

Bad debts- Meaning- Those debtor who have bankrupt nd not paying the dues eg. You hv made crefit sale of 10000 the debtor is not paying you total or partial amount. Understanding - Bad debt can only occur in credit sale Law does not require reason that why debtor is not paying (there can be reason that he has gone bankrupt or not traceable) fact that you have credited sale to p&l when you made that sale and now you are debiting the p&l is the only requirement. It is actual bad debt Application- Directly dr p&l if no prov. Made If prov us given in book for bad & doubtful debt then dr that actual bad debt therefrom Bad & doubtful debt - Meaning - debtor who are not denying to pay the amount or may result bad debt in future. Eg- You made cr sale of 10000 and asked party to pay, the party is not denying but not evn payng Understanding- Occur in cr sale Not actual bad debt but you presume that debtor will not pay ( eg market goodwill of debtor not good or he is goin to liquidate) Application- Dr p&l with the amount that you think party will not pay . In above eg 10000 read less