- *accounts receivable balance whose collection is doubtful. Under most systems of *Generally Accepted Accounting Principles, an *allowance for bad debts is raised to acknowledge the reduced likelihood of recoverability of a customer balance. When an item is known with certainty to be irrecoverable, it is usually subjected to a *write-off to expenses. The term "bad debt" is sometimes distinguished from "doubtful debt" in that the former designates a customer balance known to be irrecoverable, while the latter indicates a customer balance of potential, if unlikely, recoverability. However, the two terms are frequently used synonymously.
Auditor's dictionary. 2014.
Look at other dictionaries:
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bad debt — noun count money that someone owes but will never pay … Usage of the words and phrases in modern English
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bad debt — An uncollectible debt. A debt which may be deducted from gross income in determining income subject to tax. Anno: 39 ALR2d 898. A debt which is worthless because, in the exercise of sound business judgment, there is no likelihood of recovery… … Ballentine's law dictionary
bad debt — UK / US noun [countable] Word forms bad debt : singular bad debt plural bad debts business money that someone owes but will never pay … English dictionary