What Are Bad Debts?

Bad debt is an amount owed to a business, which it considers, or proves to be, irrecoverable. There are several reasons why a debtor may fail to pay an amount due from him, e.g. death, bankruptcy, insanity, etc. Once a business is convinced that an amount due from a debtor is no more recoverable, it … Read more

Recovery of bad debts

Occasionally, a business may find that an amount that it had previously written off as a bad debt is received at a later date. The receipt of such an amount is called recovery of bad debts. Clearly, this cannot be credited to the personal account of the debtor as that account was closed down when … Read more

Provisions for bad debts

What is bad debt? Bad debt is an amount, A business fails to recover from its debtors. At the end of each financial year, most businesses that offer credit to their customers have significant amounts owed to them by their debtors. From their experience, businessmen know that not all the amount shown in the balance … Read more