I was wondering if anyone could enlighten me on this:
A profit and loss has been done for sole trader showing a loss for the year, there is no balance sheet. just a p & l for their SA return. The client deposited some money in the account to cover the extra costs, how is this treated in the p n l? i know if there was a bs it would be capital, however for the simple p n l how do i account for the extra money deposited?
Also if a client hasnt paid and stopped trading, i can include that as a bad debt?
If there is no balance sheet, then any capital intoduced will not be shown.
If a customer has not paid, then you can only include it as bad debt if you can show that you have tried every possible means of getting it. Is the defaulter a sole trader also or ltd co? If sole trader then you can go through the small claims to justify writing off the debt. If ltd co, has the co gone into liquidation? This can be used to show that the money will not be forthcoming.
