Uncollectible Accounts Expense / Doubtful Debt
It is an estimated bad debts expense which is created by making an estimation based on the past experience of customers ( Accounts Receivable Aging Report ) that some percentage of Accounts Receivable may not be recovered from our customer. It is also called Doubtful Debt under British Accounting System. It is different from Actual Bad Debts Written Off in the way that it is just an estimated expense which may come true or not while Actual Bad Written Off is the expense which is actually suffered by the business in the accounting period i n which it is incurred Uncollectible Accounts Expense Journal Entry Considering the example of the Sales made to Customer (Mr. A) on 1st July, 2018 for Rs. 30000. Suppose, we make an estimation that 2% will not recovered from customer based on past experience with this customer. Then following Accounting Journal Entry is passed in the Book of our company: Uncolle...