Bad Debt Bookkeeping Question
Where do you record bad debt? What is the proper accounting treatment for uncollectible accounts?
Our business makes the following entry when a sponsorship is agreed upon. We debit Accounts Receivable and credit Deferred Revenue Sponsorships.
I have an account that is uncollectable. I have made an entry to debit Bad Debt and credit Accounts Receivable. I need a debit to clear the Deferred Revenue. What is the offsetting credit?
What is a Bad Debt?
What is a Bad Debt
What exactly is a bad debt, or uncollectible account? And how do you do the bookkeeping for it?