I have a confusion as to whether bad debt accounts are factored into the accounts receivable of a company's balance sheet?

To clarify/illustrate my question,

If a company is expecting $3000 in future payments for services it has provided, but estimates that $1000 of this sum will never be paid, will the amount listed under accounts receivable on the balance sheet be $3000 or $2000?

Also, is this method standard/uniform in every country?

Thanks in advance


Only when you actually write off the bad debt should your accounts receivable go down. There are rules for this under GAAP (Generally Accepted Accounting Principles).

For a more elaborate explanation look here: http://smallbusiness.chron.com/gaap-rules-bad-debt-42598.html http://accountingexplained.com/financial/receivables/bad-debts

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