Question

What is bad debt for business

Answer 1

is a loss that a company incurs when credit that has been extended to customers becomes worthless, either because the debtor is bankrupt, has financial problems or because it cannot be collected. It is expensed on the income statement

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Answer 2

Answer:

here is ur answer dude

Explanation:

Bad debt is an expense that a business incurs once the repayment of credit previously extended to a customer is estimated to be uncollectible. Bad debt is a contingency that must be accounted for by all businesses who extend credit to customers, as there is always a risk that payment will not be received.

KEY TAKEAWAYS

Bad debt expense is an unfortunate cost of doing business with customers on credit, as there is always a default risk inherent to extending credit.

To comply with the matching principle, bad debt expense must be estimated using the allowance method in the same period in which the sale occurs.

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