Accounts & Finance

Bad Debt is a debt of which nothing can be recovered, and it is written-off as uncollectible in the books of account. On the other hand, doubtful debt is just an estimation of the amount whose collection is unsure and may turn out as bad debt in the future. Bad debts are those which cannot be collected by the business, and will usually have been clearly identified as such. Doubtful debts, in comparison, are unlikely to be collected. There is still the possibility of receiving payment for these outstanding balances, however small.