Bad Debts- Amounts owed to companies which will not be paid

Q.  Which of the following are the amounts owed to a company that are not going to be paid?
- Published on 20 Jul 15

a. Bad debts
b. Non-performing Assets
c. Out of order accounts
d. Overdrawn accounts

ANSWER: Bad debts
The bad debts associated with accounts receivable is reported on the income statement as Bad Debts Expense or Uncollectible Accounts Expense.

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