Definition:
A bad debt or un-collectible account is a receivable owed by a customer, client, or patient which the business owner or creditor is not able to collect. Bad debts may be written off by the creditor at the end of the year, if it is determined that the debt is un-collectible.
In order to determine if there are any bad debts in the accounts receivable listing, an accounts receivable aging report is run, showing how much money is owed by each creditor and how long it has been outstanding.
