Bad Debt - Law Dictionary Search Results
Home Dictionary Name: bad debtbad debt expense
bad debt expense An expense account that reflects the amount of your company's accounts that are not collectable, that is the amount of your company's accounts that are "bad debts." A "bad debt expense" account is an expense account of your company. A typical company makes an estimate as to how much it has in bad debts on a periodic (usually monthly) basis. For example, your company estimates that it has about $1,200 per year in accounts that are not collectable. Your company would make the following accounting entries each month: a debit to your "bad debt expense" account in the amount of $100, and a credit to your "allowance for bad debts" account in the amount of $100. When you actually decide that a particular debt is not collectable, you would not make an entry to the "bad debt expense" account. Instead, you would debit your company's "allowance for bad debts" account for the amount of the bad debt and credit your accounts receivable account for that amount. ...
allowance for bad debts
allowance for bad debts Your best guess at how much of your accounts receivable will not be collectable. In other words, your best guess at how much of your accounts receivable will be "bad debts." An "allowance for bad debts" account is kind of like a savings account for bad debts. Your company puts money into it on a periodic basis (usually monthly) as an expense of the company. When you decide that a particular account is not collectable, you tap the allowance for bad debts account to pay for the bad debt. Because you already made the allowance for bad debts, your profit and loss statement will not be out of whack in the particular month that you decide to "write-off" a particular account. Your company's accounting entries to "write off" a $500 account that you have decided is not collectable would look something like this: a debit to your allowance for bad debts account in the amount of $500 and a credit to your accounts receivable account for $500. ...
Bad debt
Bad debt, means the debt which cannot be collected. An income tax deduction is allowed for bad debts, Webster's Dictionary of Law, Indian Edn., (2005), p. 41....
bad debt recovery
bad debt recovery An account that you "wrote-off" as not collectable, but that was later paid by the customer. When this happens, you must adjust your accounts. Your company's adjusting entries would look something like this: A debit to accounts receivable in the amount of $500 and a credit to allowance for bad debts in the amount of $500; and a debit to cash in the amount of $500 and a credit to accounts receivable in the amount of $500. ...
bad debt
bad debt see debt ...
debt
debt [Old French dette, ultimately from Latin debita, plural of debitum debt, from neuter of debitus, past participle of debere to owe] 1 : something owed: as a : a specific sum of money or a performance due another esp. by agreement (as a loan agreement) [to pay the s…of the United States "U.S. Constitution art. I"] [a for alimony] b : an obligation to pay or perform on another's claim [discharged the ] compare asset, equity NOTE: It is often up to the courts to decide what is or is not a debt under various laws. Courts disagree whether criminal restitution is a debt under the Bankruptcy Code. The historical practice of imprisoning debtors for nonpayment is no longer used. antecedent debt : debt that is incurred prior to a property transfer paying or securing the debt compare preference bad debt : a debt that cannot be collected NOTE: An income tax deduction is allowed for bad debts. consumer debt : debt that is incurred by an individual primarily for the purchase of ...
collection account
collection account an unpaid debt referred to a collection agency to collect on the bad debt. This type of account is reported to the credit bureau and will show on the borrower's credit report. Source: U.S. Department of Housing and Urban Development ...
bad faith
bad faith : intentional deception, dishonesty, or failure to meet an obligation or duty [no evidence of bad faith] compare good faith in bad faith : with or characterized by intentional deception or dishonesty [possessor in bad faith] [an obligation to not act in bad faith "Hillesland v. Federal Land Bank Ass'n, 407 N.W.2d 206 (1987)"] ...
Bad faith
Bad faith, is the opposite of good faith, generally implying or involving, but not limited so, actual or constructive fraud, or a design to mislead or deceive another, or any other sinister motive. Conceptually bad faith can be understood as a 'dishonest intention', Harrison v. Telon Valley Trading Co. Ltd., (2004) 1 WLR 2577.Bad faith, is more appropriate to a consideration of commercial dealings and should not routinely be introduced into a criminal trial because it might confuse to jury and deflect them from their task of deciding whether the public office had been abused by the conduct of office holder, although there might be cases in which the concept of bad faith might be relevant to an assessment of the standard of the defendant's conduct, Attorney-General's Ref. No. 3 of 2003, (2005) LR 73 (QB): (2004) EWCA Crim 868....
Debt
Debt [fr. debitum, Lat.], a sum of money due from one person to another. An action of debt lay where a person claimed the recovery of a liquidated or certain sum of money affirmed to be due to him; and it was generally founded on some contract alleged to have taken place between the parties, or on some matter of fact from which the law would imply a contract between them. This was debt in the debet, which was the principal and only common form. There is another species mentioned in the books, called debt in the detinet, which lay for the specific recovery of goods, under a contract to deliver them. An action of debt as a technical term is now obsolete. See PLEADINGS. The order of the payment of debts and expenses out of legal assets in an ordinary administration action in the Chancery Division of the High Court is as follows:-1. Funeral expenses, which in the case of an insolvent estate must be strictly reasonable and necessary only, the executor or administrator being personally liabl...
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