What is Bed Debts? In Which Statement we are Recording Bed Debts?

Bad debts is the expectedamount of Accounts Recievable that will not be collected.

Its accounting entry includes2 accounts :

1- bad debt Expense : it is Income Statement account 

2- allowance for uncollected balances : Balance Sheet account (cotra Assets account )

Bad Debts are expenses to the company carrying out from the debtors of the company and it will be recorded in Income and expenses statement (profit and Loss a/c) in the list of expenses.

 

 

Bad Debts are those Debts which are expected not to be collectible and lost on the way :)

Many businesses maintain a cushion to counter the effect of this loss and they establish Bad Debts Provision to charge a small percentage to Income Statement and accumulate it in the Balance Sheet. 

Bad Debts is an estimated amount of Accounts receivable which are considered collectible.

The Bad Debts expense is presented in Income Statement while the Allowance for Bad Debts are presented in Balance Sheet as contra account to Accounts Receivable to

A debt that is not collectible and therefore worthless to the creditor. This occurs after all attempts are made to collect on the debt. Bad debt is usually a product of the debtor going into bankruptcy or where the additional cost of pursuing the debt is more than the amount the creditor could collect. This debt, once considered to be bad, will be written off by the company as an expense.

well, it is the amount which never be collected from Debtor being laid down for long time and therefore it should be adjusted while a decision make by Management upon the merits of debtor financial solvency. What's ever it to be transacted by followed

Bad debt expense is at debit side of Income statement

Allowance for Uncollected account is less from Accounts Receivable at assets side of Balance sheet