Accounting Dictionary - Letter D
of accounting for bad debt is the practice of recording bad debt expense when a particular account is determined to be uncollectible. No allowance for bad accounts is recorded at the end of each accounting period under this method. Accounts receivable write-off is recorded directly in the bad debt expense account in the income statement. This method does not comply with generally accepted accounting principles because it fails to properly match bad debt expenses with revenues in the year of sales and to present accounts receivable at the net realizable value.
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