bad debt Definition

bad debt

Definition

Accounts receivable that will likely remain uncollectable and will be written off. Bad debts appear as an expense on the company's income statement, thus reducing net income. In general, companies make an estimate of bad debt expenses that might be incurred in the current time period based on past records as part of the process of estimating earnings. Most companies make a bad debt allowance since it is unlikely that all of their debtors will pay them in full.

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bad debt is ...
... part of the Accounting, Lending & Credit and Investor Relations subjects.

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accrual basis accounting - More

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bad debt reserve, charge off, net capital ratio, right of recourse, valuation reserve, carrying charges

bad debt appears in the definitions of these other terms on BusinessDictionary.com

direct write off method, free capital ratio, reserve for bad debt, accounts receivable (A/R), accounts receivable aging, and

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