2016-11-21 00:00:00 Accounting & Bookkeeping 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

Tipping in Canada: A Restaurant Guide

When travelling around the globe, many travellers will research the worldwide tipping…

Read more

A Guide to Finance & Accounting for Small Business Owners

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

Read more

The Ultimate Small Business Accounting Checklist

Managing finances doesn’t have to be the bane of your professional existence.…

Read more