reserve for bad debt

Definition

Money set aside by a company or organization to compensate for a potential increase in debt that might possibly not be paid back. The reserve is created by simultaneously debiting the bad debt expense and by creating a contra-asset by crediting reserves for the bad debt. For example, a university that provides loans to its students will likely be unable to collect all of the outstanding loans, since some students will experience difficulty in repaying all of their debt. The university would create a reserve for bad debt to ensure that an increase in bad debt does not eat into other funds.

单词	reserve for bad debt
释义	reserve for bad debt Definition Money set aside by a company or organization to compensate for a potential increase in debt that might possibly not be paid back. The reserve is created by simultaneously debiting the bad debt expense and by creating a contra-asset by crediting reserves for the bad debt. For example, a university that provides loans to its students will likely be unable to collect all of the outstanding loans, since some students will experience difficulty in repaying all of their debt. The university would create a reserve for bad debt to ensure that an increase in bad debt does not eat into other funds.
随便看	in-house financing in-house processing float initial capital initial cash flow Initial Claims initial eligibility period initial interest rate initial investment initial margin initial premium initial production initial public offering (IPO) initiate coverage initiative initiatives injection molding injury injury independent of all other means in kind inland bill inland bill of lading (B/L) inland freight charge inland marine insurance inland revenue inland waterways bill of lading