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Kaplan

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How do I find the bad debt expense percent when all the info I have is sales, credit sales, collections on accounts receivable, and receivable written off?

  • Kaplan -

    Isn't bad debt expense the same as receivables written off? (You might add "collection costs" to that to get bad debt expense). To express bad debt as a percentage, I would divide it by credit sales. The debt writeoffs and credit sales should be for the same or comparable periods of time.

    Some banks and investment brokers are having a big problem with this kind of accounting question now, as tens of billions of dollars in bad debts are being written off.

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