@accountingb4: Bad Debt (in Accounting) Definition: 1. Bad debt is the amount owed by a customer that is considered uncollectible and is therefore treated as an expense in the accounting records. Key Points: 1. It arises from credit sales. 2. It is recorded as an operating expense. 3. It reduces the business’s profit. 4. It also reduces the value of Accounts Receivable (Trade Receivables). Example: 1. A business sells goods worth ₦50,000 on credit. If the customer cannot pay due to bankruptcy or other reasons, the ₦50,000 is recognized as bad debt. Journal Entry (Direct Write-off Method): Dr. Bad Debt Expense …………… ₦50,000 Cr. Accounts Receivable ………. ₦50,000 Simple Definition for Students: 1. Bad debt is the amount owed by a customer that cannot be collected and is recorded as an expense in the books of account.#usa🇺🇸 #account #financialfreedom

accountingb4

Open In TikTok:

Region: NG

Monday 29 June 2026 00:33:04 GMT