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Why doubtful debt is treated as an asset and Bad debt as an expense?

Carlton Burgess

in Student Loans

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1 answer

Alexa Spicer on August 28, 2018

Doubtful of the debt is treated as an asset because it is the reduction in the accounts receivable before that to happen, and on the actual bad debt time is offset against the bad debt account. Bad debt is the expense because this is the loss of business incurred due to the bankruptcy or not to receive the money from the debtors.

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