bad debt


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Related to bad debt: Bad Debt Expense, Bad Debt Recovery

Bad debt

A debt that is written off and deemed uncollectible.

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.

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.

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.
References in periodicals archive ?
Additionally, a guarantor is allowed a business bad debt deduction for any payment made in the capacity as guarantor if the reason for guaranteeing the debt was business.
As a result, many are in a perilous position with nearly half (47%) having no provisions in place should an unexpected bad debt arise.
The bad debt policy is part of the process to reduce the amount of debt owing to the council.
The principal area of concern for the trainer will probably be bad debts.
But "working on bad debts first, without attention to the crying need for restructuring Japan's stalled economy, can only bring even deeper recession and more deflation--and more bad debt.
There are continuing arguments among policymakers and analysts about the size of bad debt because of the obscure Japanese methods of classifying debts as between "troubled" loans and truly nonperforming loans.
In both Japan and Turkey, bad debt is a symptom, not the cause, of economic woes.
Therefore, the court denied the company's bad debt deduction and held the loans were nonbusiness debts (Commissioner v.
This is often accounted for differently and never really tagged as part of the bad debt, although it arguably could be.
A 32 percent increase in the size of portfolios since 1994, coupled with a 34 percent decrease in bad debt since 1991 has helped U.
Although a very common item to taxpayers, bad debt deductions are not without controversy.