Malaysia is implementing GST @ 6% (VAT equivalent) on 1 April 2015. We are allowed to claim a Bad Debt Relief if the debtors have not paid us in 6 months.
Please help me up on the accounting entries & disclosure:
Accounting entries on issuance of sales invoice: Dr Debtor $106 Cr Sales $100 Cr GST Output Tax Account $6
After 6 months, on claiming Bad Debt Relief: Dr GST Input Tax Account $6 Cr GST Bad Debt Relief Account $6
On subsequent payment: Dr Bank $106 Dr GST Bad Debt Relief Account $6 Cr Debtor $106 Cr GST Output Tax Account $6
However, if written off: Dr Bad Debt Written Off $100 Dr GST Bad Debt Relief Account $6 Cr Debtor $106
Questions: 1) Are the above entries correct? 2) How should the GST Bad Debt Relief Account be presented in Balance Sheet? Set off against Debtors or disclosed under Current Liabilities?
