• # 70985
• Mon 16 May 2011 01:30 AM

We have a customer that we would like to right off as a bad debt BUT there is still a possiblity that some money may be received once the administrators have sorted things out.
If we have made the customer a 'BAD DEBT' and we receive some payment how does this get recorded.

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• # 71025
• Mon 16 May 2011 08:42 PM

> Hi Step 1 is to always write off the whole debt asap - this is the way you get the tax deduction for the bas debt
if you hold off any only write off part fo the debt, in many circumstances, you DO NOT get a tax deduction for the amount you DONT receive because it is deemed you have "Settled" for the lesser amount.

step 2: any receipt that comes in later is income of "Bad Debt recovered" income etc

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• # 119138
• Thu 15 Oct 2020 02:25 PM

To record the bad debt expenses, you must debit bad debt expense and a credit allowance for doubtful accounts. With the write-off method, there is no contra asset account to record bad debt expenses. Therefore, the entire balance in accounts receivable will be reported as a current asset on the balance sheet.

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