When sales are made on credit, businesses typically will incur some amount of bad debt...
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Accounting
When sales are made on credit, businesses typically will incur some amount of bad debt when not all customers pay their debt owed. These losses become operating expenses. Under accrual accounting, the expense is recorded in the same period as the sale but how do companies do this when the actual amount of uncollected accounts is not known until later?
*** Can you explain this to me in a way a non accounting person can understand. Thank you**
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