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Accounting

When an account is determined to be uncollectible, "writing off" the bad debt usually involves what????????

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

When an account is determined to be uncollectible, "writing off" the bad debt usually involves what????????

Definition Definition Receivable amount that a company is owed, but did not receive, and which may not be receivable in future.

Expert Solution

INTRODUCTION

When the company sells the goods on credit it allows some credit period for the customers to pay off their debts. Sometimes in the future date, some customers fail to pay the debt amount. This amount will be considered bad debt. The company anticipates the bad debt in advance based on past experience and makes allowances for the doubtful debts.

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