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:
“In doubtful cases the more liberal interpretation must always be preferred.”
—Marcus Tullius Cicero (106–43 B.C.)
“Even the poor student studies and is taught only political economy, while that economy of living which is synonymous with philosophy is not even sincerely professed in our colleges. The consequence is, that while he is reading Adam Smith, Ricardo, and Say, he runs his father in debt irretrievably.”
—Henry David Thoreau (1817–1862)
“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)