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:
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—Friedrich Nietzsche (1844–1900)
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—Frank Pittman (20th century)
“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)