Bad/Doubtful Debts Flashcards
What is the definition of Bad Debt?
A debt that must be ‘written off’ as irrecoverable or uncollectable because it has been confirmed that the Account Receivable is unable to pay due to liquidation or bankruptcy
What is the definition of Doubtful debts?
A debt that is unlikely to be collected in the future but has not yet been ‘written off’ as it has not been confirmed that the Account Receivable is unable to pay
What is the definition of integrity?
The quality of being honest and having strong moral principles.
What is the definition of impartiality?
Equal treatment of all rivals or disputants; fairness
What is the definition of Objectivity?
The quality of being objective
What is the definition of Confidentiality?
The state of keeping or being kept secret or private.
Net credit sale formula
Net Credit Sale = Gross Credit sales - Sales Return - Sales Allowance - Discounts
Allowance for doubtful debts definition?
A negative account that records the balance of doubtful debts (that are unlikely to be collected in the future but have not yet been written off).
