Bad Debt Reserve

Business, Legal & Accounting Glossary

Definition: Bad Debt Reserve

Bad Debt Reserve

Full Definition of Bad Debt Reserve

An amount set aside as reserve for bad debts. In general, companies make an estimate of bad debt expenses that might be incurred in the current time period based on past records as part of the process of estimating earnings. Most companies keep a bad debt reserve in the expectation that some small percentage of their creditors will not pay them in full. If the bad debt reserve is accurately estimated, then a company’s net income will not be reduced when the debts are actually written off as being uncollectable.

Cite Term

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Page URL
Modern Language Association (MLA):
Bad Debt Reserve. Payroll & Accounting Heaven Ltd.
December 08, 2021
Chicago Manual of Style (CMS):
Bad Debt Reserve. Payroll & Accounting Heaven Ltd. (accessed: December 08, 2021).
American Psychological Association (APA):
Bad Debt Reserve. Retrieved December 08, 2021
, from website:

Definition Sources

Definitions for Bad Debt Reserve are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 20th November, 2021 | 0 Views.