What is the provision for bad debts?

WHAT IS THE PROVISION FOR BAD DEBTS?
A bad debt provision is an estimate of debtors that will turn into bad debts and as a result the business will not receive this money. In more technical terms, the bad debt provision is an approximate value which is set against the future recognition of debtors as being uncollectible and this will normally be calculated as a percentage of the total debtor’s amount. It is extremely difficult to calculate the precise value of bad debts that will occur during an accounting period. Due to this, in practise it is normal to witness frequent changes of the businesses bad debt provision. These changes may lead to increases or decreases in future bad debt expenses. Since the changes of provision can be seen as a means of manipulating profits, a business should explain the reasons for making the adjustments.

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Our content is to be used as an EDUCATIONAL TOOL that aims to provide a foundation for individuals to learn financial accounting, management accounting and bookkeeping topics as practiced in the United Kingdom. As a result, not all complexities are shown or provided. Examples may include but are not limited to; differences between financial reporting, accounting standards or tax treatments. We are NOT ENGAGED in the providing of accounting, bookkeeping, financial, investment, tax, or other professional services. You should consult with a qualified or professional such as an accountant, business advisor, investment specialist, lawyer, solicitor, etc., with regards to specific facts and situations.

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[mathewvalliath]

At the end, why do we credit the provision for bad debts account?

[gracemartin]

What does provision mean in accounting terms

[abychrist]

I must say thank u I got help I wanted soo much

[destinymcpherson]

What if the the provision for bad debts is to be created by £400 and the bad debts is £1200
How would you go about doing that?