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:
“A doubtful choice, of these three which to crave,
A kingdom, or a cottage, or a grave.”
—Edward De Vere, 17th Earl of Oxford (1550–1604)
“I wish the days to be as centuries, loaded, fragrant. Now we reckon them as bank-days, by some debt which is to be paid us, or which we are to pay, or some pleasure we are to taste.”
—Ralph Waldo Emerson (1803–1882)
“One should never make one’s debut with a scandal. One should reserve that to give an interest to one’s old age.”
—Oscar Wilde (1854–1900)