As financial accountant of a company you discover the following three items of information at the end of the financial year. Which would lead to a provision for doubtful debts, and which would lead to an expense of a bad debt?

1. You see from your records that one of your customers is becoming increasingly slow to pay amounts due.

2. You see a newspaper report that a customer has been declared bankrupt.

3. A customer is disputing an invoice you have sent, on the grounds that the item supplied was not the colour specified in the customer’s order form.