Bad-debt meaning

Accounts receivable that are unlikely to be paid. Companies typically write off bad debts, setting up a special reserve account that they then charge. In a recession or tough economic times, the amount of bad debt increases. Companies, as well as small business owners, can write off the bad debt as a business deduction on their income taxes.
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An uncollectible debt arising due to the debtor’s refusal to pay, insolvency, or bankruptcy.
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(business, accounting) A debt which cannot be recovered from the debtor, either because the debtor doesn't have the money to pay or because the debtor cannot be found and/or forced to pay.
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