What do you mean of Bad Debts and Reserve for Bad and Doubtful Debts? how do they result in Financial Statements?

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When a debtor  does not pay the amount owing, the business has incurred a bad debt.   A reserve or provision  for bad debts is a contra debtors account and it shows the estimated total of future bad debts. A bad debt is an expense is the income statement. a  reserve for provision for doubt debts is also treated as an expense in the income statement and reduces the debtors in the statement of financial position.