2016-11-21 00:00:00 Finance and Accounting English Want your balance sheet to be clean? Review past due accounts to determine whether these items should be written off as bad debt. https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2017/03/Accounting-Manager-Reviews-Past-Due-Accounts-To-Determine-If-They-Should-Be-Pursued-Or-Written-Off.jpg https://quickbooks.intuit.com/ca/resources/finance-accounting/accounting-tips-review-significant-past-dues-annually/ Accounting Tips: Review Significant Past-Dues Annually

Accounting Tips: Review Significant Past-Dues Annually

0 min read

Review past due accounts to determine whether any accounts receivable should be written off. This practice should occur periodically, especially at year-end. Consult with a financial advisor or collection agent to review specific accounts and determine the likelihood of collecting the payment. These accounts are typically multiple months past due or from vendors that are currently going through a bankruptcy.

This process is important as the balance sheet should be cleaned up before the end of the year. Accounts that will not be collected should not be included as assets. Instead, these balances should be written off as a bad debt expense because the result of the transaction is effectively a loss.

References & Resources

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

Related Articles

A Guide to Finance & Accounting for Small Business Owners

As a small business owner, you probably have plenty of questions on…

Read more

Quebec Tax Guide: Tips and Gratuities

In Quebec, Revenu Quebec is the provincial equivalent of the Canada Revenue…

Read more

Choose The Best Accounting Software For You : A Guide to Accounting Software in Canada

Choosing the right accounting software is a critical decision for any small…

Read more