How is Bad debt accounted in the Balance Sheet?
Posted February 14th, 2009 by admin 1 Comment »
sonyboy812 asked:
My understanding is that bad debt is charged as an expense in the income statement and also remove the amount of bad debt from the asset side of the balance sheet.
if net assets = equity, then if asset is lower due to bad debt, then equity must reduce to balance the balance sheet. But, what is deducted in the equity side?
Thanks