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Discuss the Bad Debt Expense? Why is this an important expense account for the rules of...

Discuss the Bad Debt Expense?

Why is this an important expense account for the rules of Accrual Base Accounting?

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Bad Debts Expense Represents that part of accounts recievable which has proved to be irrecoverable. or the Customer has refused /abstained himself to pay the amount due to the person who has supplied goods to him.

IN Accrual Basis of accounting Bad Debts EXpenses is an important account as in all business there are credit sales and also it is common for every business that some part of the credit sale will not be recovered. Hence it is customary for the business organizations to Create a provision for Bad Debts based on the past experience of the business on the cases of Irrecoverability.

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