By Leanna Kelly When companies do business on credit, they have accounts payable and accounts receivable. They represent accrued revenues and debts that will eventually come due. But what happens when your accounts receivable come due and you don’t get paid? For many companies, it ends up as a bad debt expense.
A bad debt expense is a cost that is recognized when an entity is unable to collect a receivable due to a customer being unable to pay. It’s the result of default. Bad debt expense is the accounting standard for removing uncollectable debt from accounts receivable, and it’s a common practice …read more
