The amount which is not recoverable from debtors.
answer in one word?????
Answers
Answer:
Bad Debt
Explanation:
The amount that is not recoverable from a business' debtors is termed bad debt.
For example,
Mr. A has buys pens for Rs. 8 and sells them for Rs. 10.
A person, let's say, Mohan buys 100 pens from him on credit.
So, now, Mohan is liable to pay Rs. 1000 to Mr. A.
But, let's say that Mohan becomes insolvent.
The term insolvent is used to describe a person who is unable to pay off his debts in any way.
This means that Mohan, in any case, can't pay Rs. 1000 to Mr. A.
So, Mr. A, in his books of Accounts will write off Mohan's debt as bad debt, which means that he sold goods on credit to Mohan but Mohan was not able to pay back the debt.
Answer:
Explanation:
Bad debts are those items of charge on the profits of the company, that indicate the sums of money that could not be recovered from a debtor, during the year.
These are the trade receivables that will not be collected.