Q what are bad debtsbad debts -- amounts owed to a company, Ask an Expert

Accounting

Q. What are Bad debts?

Bad debts -- amounts owed to a company which aren't going to be paid. An accountreceivable becomes a bad debt when it's recognized that it won't be paid. Occasionally, baddebts are written off when recognized. This is an expenditure. Occasionally a reserve is set up toprovide for possible bad debts. Adding or creating to a reserve is also an expense.

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Accounting Basics, Accounting

Category:- Accounting Basics
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