Coeur d’Alene Business Bad Debt Expenses Defined

This expense appears on the income statement and is increased by the amount of the receivable that will not be collected (debt owed to your CDA business that will not be paid).

When this expense is created, a contra-asset to accounts receivable is also created called allowance for bad debts. This contra-asset reduces the accounts receivable account on the balance sheet and keeps the two sides of the balance sheet in balance.

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