uncollectible

(adjective)

Receivables that cannot be collected.

Related Terms

Examples of uncollectible in the following topics:

  • Write-Offs

    • The bad debt is recognized as an expense at the point when judged to be uncollectible.
    • If Smith's USD 750 uncollectible account were recorded in Uncollectible Accounts Expense again, it would be counted as an expense twice.
    • Allowance for uncollectible accounts 3,000 Cr. // 750 Dr. // 2,250 Cr.
    • If the company wrote off any uncollectible accounts during 2009, it would debit Allowance for Uncollectible Accounts and cause a debit balance in that account.
    • At the end of 2009, the company would debit Uncollectible Accounts Expense and credit Allowance for Uncollectible Accounts.

  • Valuing Accounts Receivable

    • These uncollectible accounts are called bad debts.
    • Since the specific customer accounts that will become uncollectible are not yet known when the adjusting entry is made, a contra-asset account named allowance for bad debts, which is sometimes called allowance for doubtful accounts, is subtracted from accounts receivable to show the net realizable value of accounts receivable on the balance sheet.

  • Collection from Delinquent Payables

    • If an individual does not repay borrowed money to a credit card company and 6 months of nonpayment have passed, the credit card company may declare a "charge-off. " This means that the debt is "written off as uncollectable," so that the credit card company will get a tax exemption on that debt.
    • While a charge-off is considered to be "written off as uncollectible" by the bank, the debt is still legally valid, and remains as such after the fact.

  • Recognition of Revenue After Delivery

    • The cost recovery method is used when there is an extremely high probability of uncollectable payments.

  • Recognizing Accounts Receivable

    • To calculate the allowance for doubtful accounts using the percentage of total sales, estimate the percentage of sales that will be uncollectible.

  • Dr. David's Accounting Class

    • For each session he finds a news story about a particular situation and uses it to illustrate other concepts in his lectures, such as accounting for pledged and uncollected donations and differentiating between capital and operating expenses.On the last day, the students politely thank him for the class.