| || InvestHub.com's |
Finance Dictionary and Glossary of Investment Terms
See: Bad debt
1. A debt that is deemed uncollectable and written off. Also known as a bad debt.2. A one time expense incurred by a company that negatively affects earnings.
Accounts receivable that will likely remain uncollectable and will be written off. Charge offs appear as an expense on the company's income statement, thus reducing net income. In general, companies make an estimate of charge off expenses that might be incurred in the current time period based on past records as part of the process of estimating earnings. Most companies make a charge off allowance since it is unlikely that all of their creditors will pay them in full. also called bad debt.