Provision for Doubtful Debts & Bad Debts Definition

What is  Provision for Doubtful Debts  &  Bad Debts

Provision for Doubtful Debts 

Provision denotes any amount retained by way of providing for any known receivable that is doubtful of collection. The amount of such debt that is doubtful of collection may not be determined with absolute accuracy but with substantial estimation.

Bad debts

An accounts receivable, which is not collectible, is a bad debt. In other words, debts owed to the Company, which are considered to be irrecoverable, are called bad debts.


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