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:
“...America has enjoyed the doubtful blessing of a single-track mind. We are able to accommodate, at a time, only one national hero; and we demand that that hero shall be uniform and invincible. As a literate people we are preoccupied, neither with the race nor the individual, but with the type. Yesterday, we romanticized the “tough guy;” today, we are romanticizing the underprivileged, tough or tender; tomorrow, we shall begin to romanticize the pure primitive.”
—Ellen Glasgow (1873–1945)
“It is a well-settled principle of the international code that where one nation owes another a liquidated debt which it refuses or neglects to pay the aggrieved party may seize on the property belonging to the other, its citizens or subjects, sufficient to pay the debt without giving just cause of war.”
—Andrew Jackson (1767–1845)
“Mutual repect implies discretion and reserve even in love itself; it means preserving as much liberty as possible to those whose life we share. We must distrust our instinct of intervention, for the desire to make one’s own will prevail is often disguised under the mask of solicitude.”
—Henri-Frédéric Amiel (1821–1881)