Doubtful Debt Reserve
Also known as a bad debt reserve, this is a contra account listed within the current asset section of the balance sheet. The doubtful debt reserve holds a sum of money to allow a reduction in the accounts receivable ledger due to non-collection of debts. This can also be referred to as an allowance for bad debts. Once a doubtful debt becomes uncollectable, the amount will be written off.
Read more about this topic: Bad Debt
Famous quotes containing the words doubtful, debt and/or reserve:
“In doubtful cases the more liberal interpretation must always be preferred.”
—Marcus Tullius Cicero (106–43 B.C.)
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—Ellen Glasgow (1873–1945)
“We must reserve a back shop all our own, entirely free, in which to establish our real liberty and our principal retreat and solitude.”
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