1. Bad debt loss refers to the uncollected accounts receivable of the enterprise and the part approved as loss. Enterprises that withdraw bad debt reserves are also reflected in this account, and the bad debt reserves are directly offset when bad debts occur. Enterprises without provision for bad debts shall be directly accounted for in this account when bad debts occur. The bad debt loss of an enterprise shall be confirmed according to the provisions of the Notice of the Ministry of Finance on Establishing and Improving the Management System of Enterprise Accounts Receivable. Bad debt loss and its accounting is an important aspect of accounts receivable accounting.
2. As the name implies, bad debt loss refers to the loss caused by bad debts. Therefore, to understand the bad debt loss and its accounting, we must first talk about what is bad debt.