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:
“The man of large and conspicuous public service in civil life must be content without the Presidency. Still more, the availability of a popular man in a doubtful State will secure him the prize in a close contest against the first statesman of the country whose State is safe.”
—Rutherford Birchard Hayes (1822–1893)
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