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:
“Were it good
To set the exact wealth of all our states
All at one cast? to set so rich a main
On the nice hazard of one doubtful hour?
It were not good.”
—William Shakespeare (1564–1616)
“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)
“Common experience is the gold reserve which confers an exchange value on the currency which words are; without this reserve of shared experiences, all our pronouncements are cheques drawn on insufficient funds.”
—René Daumal (1908–1944)