General Accounting

what it needs to be done in terms of submitting forms when a customer files for bankruptcy and the owed amount is written off?

Does written off customer balance (bad debt expense in our records) require submitting a form to inform necessary governmental bodies?

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Answer

  1. 74 Answers

    Hi there once you are notified of the customer’s bankruptcy and the amount owed to your company has been discharged in bankruptcy there is no notification you need to send to anyone. The only thing you should do is write the balance off (if you use the direct write-off method for accounting for bad debt) to bad debt expense.

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