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)
“They who have been bred in the school of politics fail now and always to face the facts. Their measures are half measures and makeshifts merely. They put off the day of settlement, and meanwhile the debt accumulates.”
—Henry David Thoreau (1817–1862)
“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)