Bad debt refers to an amount owed by a debtor that is unlikely to be recovered, such as when a company goes into liquidation. The full amount should be written off to the profit and loss account of the relevant period or to a provision for bad debts upon identification, in line with accounting prudence principles.
A charge-off is a debt that a creditor declares as unlikely to be collected after the debtor has become significantly delinquent. This status often affects the debtor's credit score negatively.
A deadbeat is an individual or entity that neglects or intentionally avoids paying their bills for goods or services received, creating financial burdens for service providers and creditors.
The direct charge-off method is an accounting technique used to write off specific bad debts when they are deemed uncollectible.
Doubtful debt refers to an amount owed to an organization by a debtor that is unlikely to be received. Organizations often create a provision for doubtful debts based on specific debts or general assumptions about debtor reliability.
An uncollectible account is a customer account that cannot be collected due to the customer's unwillingness or inability to pay. Such accounts may be written off as worthless after several collection attempts, although further collection efforts may continue.
The act of reducing the value of an asset or a debt to zero in a balance sheet, often due to obsolescence, expiration, or uncollectibility.
