Answer: Bad debt and doubtful debt are terms used in accounting to classify debts that a...
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Answer: Bad debt and doubtful debt are terms used in accounting to classify debts that a company is unlikely to collect from its customers. Here's how they differ: Bad Debts: This alludes to the receivable sum that has basically been considered uncollectible by the organization. The organization has depleted all endeavors to gather installment from a client and closes it won't ever get the installment. As a result, it deducts the debt from the income statement as a loss under the heading "bad debt expense." The same amount is also reduced in the accounts receivable section. Providing customers with credit is frequently associated with bad debts. Answer: Bad debt and doubtful debt are terms used in accounting to classify debts that a company is unlikely to collect from its customers. Here's how they differ: Bad Debts: This alludes to the receivable sum that has basically been considered uncollectible by the organization. The organization has depleted all endeavors to gather installment from a client and closes it won't ever get the installment. As a result, it deducts the debt from the income statement as a loss under the heading "bad debt expense." The same amount is also reduced in the accounts receivable section. Providing customers with credit is frequently associated with bad debts.
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Related Book For
Intermediate Accounting
ISBN: 978-1119048534
11th Canadian edition Volume 1
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Nicola M. Young, Irene M. Wiecek, Bruce J. McConomy
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