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Is Bad debts an asset or liability?

Updated: 4/28/2022

Wiki User

∙ 13y ago

Best Answer

Neither, a bad debt becomes an expense on the P&L.

the provision created against this is liability

Wiki User

∙ 13y ago

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Continue Learning about Accounting

What decreases an asset and liability?

Decrease in asset means being using of it decreases and liability decrease means payable of debts decreases.

Is allowance for bad debts a asset?

asset . it is contra to account receivable. and it has -Ve value . -ankur

Is a trade debtors asset or liability?

yes It is an Asset, not a Liability.

Is rent income a asset liability or owners equity?

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Related questions

Bad debts is a liability or an asset?

A bad debt is a expense which affects the owners equity as it is charged against the profit and loss account and it decreases the profit of the business.

What decreases an asset and liability?

Decrease in asset means being using of it decreases and liability decrease means payable of debts decreases.

Is allowance for bad debts a asset?

asset . it is contra to account receivable. and it has -Ve value . -ankur

What is net liability?

Asset - Liability = Net Asset / Liability * Net Asset - When Asset is more than Liability * Net Liability - When Liability is more than Asset

Is a trade debtors asset or liability?

yes It is an Asset, not a Liability.

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Treatment for bad debts in financial accounts?

Bad debt is an expense and so reflected in the P&L statement. The allowance for bad debts is a contra-asset account and offsets the amount of the receivable.

Is rent income a asset liability or owners equity?

asset liability

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