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A bad debt is a monetary amount owed to a creditor that is unlikely to be paid and, or which the creditor is not willing to take action to collect because of various reasons, often due to the debtor not having the money to pay, for example, due to a company going into liquidation or insolvency.
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Question: The following information is extracted from the Trial Balance of M/s Nisha traders on 31 December 2005. Provision is to be maintained at 2% of Debtors.Sundry Debtors 80,500 Bad debts 1,000 Provision for bad debts 5,000 Additional Information Bad Debts Rs500
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