Deferred sale operations result in the existence of a balance for the debtors’ account in the books of the establishment, and usually accountants at the end of the financial period check the balances of the debtors’ accounts to ensure the extent of their collection.
As a result of examining the debtors’ balances, the facility identifies good debts, which are debts that are guaranteed to be collected, and which are related to clients. The facility’s records show that they are regular in paying their debts on their due dates. The facility also identifies bad debts, which are those debts that have no hope of collection due to the customer’s bankruptcy or otherwise. one of the reasons.
In addition, the examination may show that there is a part of the debt that may or may not occur, and these debts are known as doubtful debts, as they are debts that are likely to be collected, and in application of the policy of caution and caution, a provision must be made for doubtful debts.