[GNC] Posting a bad debt

rmomxtx at gmail.com rmomxtx at gmail.com
Wed Apr 10 12:26:22 EDT 2019


Greg,

 

You’re not hijacking the thread. Good question. Whether a bad debt is a simple loss of income or an expense depends on your method of accounting, cash or accrual. If the latter, the sale is counted as income the day you create the invoice. By the former, it isn’t income until it is paid. It is not uncommon to call a bad debt an expense. At least this is my understanding from my experience and what I studied in college. That was back in the late 60’s so what do I know? 😉

 

Roger

 

Message: 6

Date: Tue, 9 Apr 2019 16:07:18 -0700

From: Greg Feneis <mfeneis at gmail.com <mailto:mfeneis at gmail.com> >

To: Adrien Monteleone <adrien.monteleone at lusfiber.net <mailto:adrien.monteleone at lusfiber.net> >

Cc: GnuCash <gnucash-user at gnucash.org <mailto:gnucash-user at gnucash.org> >

Subject: Re: [GNC] Posting a bad debt

Message-ID:

               <CAJdmZ-V_2VLYMDVUGPWzdqzBNRiE5tmrQnoTUbjc4gy6AbZWSA at mail.gmail.com <mailto:CAJdmZ-V_2VLYMDVUGPWzdqzBNRiE5tmrQnoTUbjc4gy6AbZWSA at mail.gmail.com> >

Content-Type: text/plain; charset="UTF-8"

 

Since people are trying to associate a non payment with an expense account, does not getting paid by a customer actually constitute an expense?

 

I imagine in business, the big concerns with expenses are tracking where the revenue that doesn't become profit goes, and (at least in the US) getting tax deductions for as many deductible expenses as possible to minimize  tax liability.

 

As a sole proprietor, I think when I can't collect an invoiced amount, that's just income I can't receive.  I don't think it's an expense.  It's not revenue spent on something, and it's not tax deductible, AFAIK.

 

Sorry, I don't mean to hi-Jack the thread, it's kind of related.

 

 

 

 

Kind regards,

 

Greg Feneis <http://www.linkedin.com/in/electromechanical



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