debts Flashcards
(2 cards)
1
Q
bad debts
A
A bad debt is an amount owed by a customer that is confirmed to be uncollectible and is written off as an expense because the business will no longer receive payment.
2
Q
doubtful debts
A
A doubtful debt is an amount that the business believes may not be collected in the future. An estimate is made using the Allowance for Doubtful Debts to account for potential losses.
