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:
“It is one thing to live, another to philosophize. When therefore the question is about the conduct of our lives, and the performance of our duty, we cease to be philosophers, to be opponents, doubtful or uncertain; and become poor, simple credulous idiots; we call things by their names, and re-assume our understanding and manners; we conform our manners to those of other men, and to their laws and customs.”
—Pierre-Daniel Huet (1630–1721)
“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)
“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)