New User ? Sign Up  |  Sign In  |  Help
Dummy
ask
answer
discover
     
Search for questions :
My Profile
Categories

DorthyP

Open Question Bookmark and Share

Which is better (and why)- no bad debt expense or lower revenues?



449 day(s) ago

    Comment(s) (0)
    Report Abuse
   Find Intereseting  
   E-Mail to Friends  
   Bookmark  
   Subscribe to Answer Alert  
No comments yet !!!     Be the first to comment
Answers (2)

MelonsO 		A business that has such stringent criteria for accounts receivable that it has no bad debts may be losing sales that it might otherwise have. The idea is to strike a balance, so that you maximize sales revenue and keep the bad debts reasonable. For example, if you have revenue of $10,000 with no bad debts, but revenue would be $12,000 if you relaxed your lending criteria, and you might have bad debts of $200. However, you gained $2,000 of sales you would not have otherwise, so the net gain is $1,800 of revenue.

Try to find out what is a normal level of bad debts in similar businesses.

Posted 449 days ago

( 0 )
( 0 )
    Comment(s) (0)
   Report Abuse
No comments yet !!! Be the first to comment on this answer !!!


ujonesla 		The obvious answer to this question is no bad debt expense because it means you are not giving any money back that you thought you had earned.

But I really think I am either misunderstanding the question or you have not phrased it quite like you mean. You cannot directly compare those two items and come up with something that would mean much. You can compare lower revenues with no bad debt expense with higher revenues and some bad debt expense.

Posted 449 days ago

( 0 )
( 0 )
    Comment(s) (0)
   Report Abuse
No comments yet !!! Be the first to comment on this answer !!!

Edit your answer. Click save, when done.
Question Title Which is better (and why)- no bad debt expense or lower revenues?
Your Answer
  |         |                            
bold  italic  underline  strike       big  small       superscript  subscript 
  Allows to add a link.
Caption :
Link URL :
( Must starts with "http://" )
Add  |   Cancel
  Allow to insert an image. Must be among the following file types - *.jpg, *.gif, *.png & *.bmp.
Image Url :  
( Image url must always starts with " http:// " )
Width : pixels
( Must not be greater than 450px. Enter 0px for no resize )
Add  |   Cancel
  Allow to insert YouTube video. Insert the video embed code.
Embed Code :
Add  |   Cancel
Character Count ( Max. - 5000 ) : 1
Email this question link to friends
You must enter email-address, if name is entered and vice-versa for each friend.
Friend #1 -
Friend #2 -
Friend #3 -
Friend #4 -
Friend #5 -
  Your comment on this question
  |         |                            
bold  italic  underline  strike       big  small       superscript  subscript 
  Allows to add a link.
Caption :
Link URL :
( Must starts with "http://" )
Add  |   Cancel
  Allow to insert an image. Must be among the following file types - *.jpg, *.gif, *.png & *.bmp.
Image Url :  
( Image url must always starts with " http:// " )
Width : pixels
( Must not be greater than 450px. Enter 0px for no resize )
Add  |   Cancel
  Allow to insert YouTube video. Insert the video embed code.
Embed Code :
Add  |   Cancel
Max Allowed : 5000 Characters Current Count : 0
  Your comment on this answer
  |         |                            
bold  italic  underline  strike       big  small       superscript  subscript 
  Allows to add a link.
Caption :
Link URL :
( Must starts with "http://" )
Add  |   Cancel
  Allow to insert an image. Must be among the following file types - *.jpg, *.gif, *.png & *.bmp.
Image Url :  
( Image url must always starts with " http:// " )
Width : pixels
( Must not be greater than 450px. Enter 0px for no resize )
Add  |   Cancel
  Allow to insert YouTube video. Insert the video embed code.
Embed Code :
Add  |   Cancel
Max Allowed : 5000 Characters Current Count : 0