bad debt
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Related to Accounts Uncollectible: Allowance for Doubtful Accounts, uncollectible debt
Bad debt
A debt that is written off and deemed uncollectible.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
Bad Debt
Debt from a credit sale that the creditor is unable to collect. Debt becomes bad debt when the creditor has made all reasonable efforts to collect the debt but has been unable to do so. Often, this occurs when the debtor declares bankruptcy or when pursuing collection attempts further will cost more than the debt itself. A company writes off bad debt as an expense, which reduces its taxable income. However, it also deprives the company of cash flow that is ultimately necessary to keep it in business.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
bad debt
an accounting term for money owed to a company by customers or borrowers which is highly unlikely to be paid because, for example, a customer has become insolvent (see INSOLVENCY). Such bad debts are written off against the PROFITS of the trading period as a business cost. See CREDIT CONTROL, DEBTORS RATIO, DOUBTFUL DEBTS.Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson
bad debt
an accounting term for money owed that is unlikely to be paid because, for example, a customer has become insolvent (see INSOLVENCY). Such bad debts are written off against the PROFITS of the trading period as a business cost. See CREDIT CONTROL.Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005