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:
“...America has enjoyed the doubtful blessing of a single-track mind. We are able to accommodate, at a time, only one national hero; and we demand that that hero shall be uniform and invincible. As a literate people we are preoccupied, neither with the race nor the individual, but with the type. Yesterday, we romanticized the “tough guy;” today, we are romanticizing the underprivileged, tough or tender; tomorrow, we shall begin to romanticize the pure primitive.”
—Ellen Glasgow (1873–1945)
“Pain and fear and hunger are effects of causes which can be foreseen and known: but sorrow is a debt which someone else makes for us.”
—Freya Stark (1893–1993)
“We must reserve a back shop all our own, entirely free, in which to establish our real liberty and our principal retreat and solitude.”
—Michel de Montaigne (1533–1592)