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How to write off "Bad Debt" RRS feed

  • Question

  • Hi Everybody,

    I am using Microsoft Money (2004) version 12.0

    At this point, I need to write-off several Debt-Accounts such as Visa and Master card due to an insolvency.

    I can credit any one of the liability accounts with say $500.00 and that will reduce the amount owed to "zero" but ... to whom do I assign the debit?

    I guess the same is true for the asset accounts, those certificates have no resale value and actually no longer exist.

    What are the procedures in Microsoft Money to accomplish that?

    Many thanks to anyone who can help.

    Paul


    Thursday, May 11, 2017 3:26 PM

All replies

  • Entering that is not a problem in that Money is a single entry system. You could just create a Credit entry.  You could maybe make a payee called "Chapter 7" or the debt holder. The debt holder may send you a 1099-C,
    Thursday, May 11, 2017 3:54 PM
    Moderator
  • Create a new expense category or sub-category called "Bad debts" or "Amounts written off" in an appropriate heading (I am not US resident so do not know what would be best) and assign the debit there.

    Money comes with a pre-configured set of Categories, but these can be added to, renamed or deleted if that better suits your needs.

    Money is a double entry system, requiring both debits and credits to match at time of entry. When entries were made on paper, two separate records had to be created and if one was not made, or the amounts did not match, the accounting system was out of balance

    Friday, May 12, 2017 3:33 PM