What is bad debt?

[CindrelaAlbertX]

Accounts receivable and likely to remain uncollectible and will be canceled. Bad debts appear as an expense in the income statement of the company, thereby reducing net income. In general, companies make an estimate of the costs of bad debt that may be incurred in the current period, based on previous records as part of the process of estimating earnings. Most companies give a bad debt allowance since it is unlikely that all debtors are paid in full.

[Ionic Bond]

Those debts which are not Recoverable after insolvency of Company
are called bad Debts.

[chrisjardon]

It should be like this. Bad Debt is money that is owed to you that you will never get back. Maybe a company that goes bust owes you money, you wont get the money back. It is very important.

[robertspears]

The bad debt is generally a product of the debtor goes bankrupt or if the additional cost of pursuing the debt is more than the amount the creditor may charge. This debt, once considered as poor, will be canceled by the company as an expense.

[robertmartin]

The term bad debts usually refers to accounts receivable that will not be collected. However, bad debts can also refer to notes receivable that will not be collected.