Enterprise glossary and term center

Research and understand all the intricate terms and definitions that surround the ecosystem of enterprise resource planning (ERP), enterprise software and no-code tools.

Bad Debts - How is bad debt treated?

There are two ways to record a bad debt, which are: Direct write-off method. If you only reduce accounts receivable when there is a specific, recognizable bad debt, then debit the Bad Debt expense for the amount of the write off, and credit the accounts receivable asset account for the same amount. Allowance method.