what is bad dept in accounting term?

Question

i m concerning about all kind of bad depts that occur in trading and profit and loss account?and the solution of getting from it

Answer 1

A bad debt is a loss to you. It's a sale you made on credit to a customer and now the customer can't pay you, perhaps because he has gone bankrupt. That is why large companies have credit departments to check on potential customers before granting credit. If they are not sure, they'll grant low credit limits (a few thousand dollars) to start off with.

The attached chapter on Uncollectible Receivables will be of help to you.

Answer 2

I am not sure if you are asking about bad debts. In accounting term, bad debts refer to those debts that are being given to customers and the lender has doubts and fears that his debts will not be paid back. If you are dealing in accounting, you would usually put them into a doubtful or loss category and create reserves for it.