What is Provision for Doubtful Debts & Bad Debts
Provision for Doubtful 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.
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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