Bad Debts Written Off
Accounting For Bad Debts Written Off Bad Debt Written off means that the amount of goods sold to customers or services rendered to them are actually not recovered from our customer ( Accounts Receivable ) within the time specified. It is a Loss or Expe nse to the business and it is recorded i n Bad Debts Expe nse T Account or Ledger and then closed by transferring to Income Statement o n Expense Side at the e nd of the Accounting Period . B ad Debt Expense is considered as the actual loss to the Revenue from Uncollectible Accounts who failed to pay on time. Bad Debts Expense is different from Uncollectible Accounts Expense as bad debts is actually the real loss to the the business while Uncollectible Account Expense is an estimated expense that will happen in future if the customer will fail to pay. Bad Debts Written Off Accounting Journal Entry Suppose, Mr. A is our customer to whom we sold goods ...