Bad debt - Definition

A bad debt is an Amount that is irrecoverable by the business and is classified as an expense because the debt owed to the business is unable to be collected. This usually occurs when the debtor has declared bankruptcy or the cost of pursuing further Action in an attempt to collect the debt exceeds the debt itself.

In short, if someone owes you money that you cannot collect, you may have a bad debt.

There are two kinds of bad debts: business and non-business. A business bad debt is one that comes from operating your business, like, Loans to clients or suppliers etc. All other bad debts are non-business.



Terms near "Bad debt"

Bad debt reserve
Bailment
Balance of payments
Balance of Trade
Balance Sheet
BAM
Bank Credit
Bank Line
Bank of England
Banknotes
Ready to Trade!
First you'll need an online broker. See how much you can save by visiting Forexbite Broker Center.
Advertisement

Bad debt - Related articles & news

Featured
Top 5 factors that affect exchange rates ...

There are many factors that affect exchange rates of currencies. However some are more important in currency trading than others. These are; Interest and Inflation rates, Trade balance, Currency market speculation, Foreign investment and Central bank market intervention. Learn how to use these factors in your forex tra ...

Forex Navigation