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 doubtful whether anyone who has travelled widely has found anywhere in the world regions more ugly than in the human face.”
—Friedrich Nietzsche (1844–1900)
“A good debt is not as good as no debt.”
—Chinese proverb.
“Her face had the seamed reserve of the old in this country [Japan]. It was a neighborhood poignantly rich in old ladies.”
—Angela Carter (1940–1992)