Accounts Uncollectible


DEFINITION of 'Accounts Uncollectible'

Loans, receivables or other debts that have virtually no chance of being paid. An account may become uncollectible for many reasons, including the debtor's bankruptcy, an inability to find the debtor, lack of proper documentation, etc.

BREAKING DOWN 'Accounts Uncollectible'

Before an account is classified as uncollectible, it usually becomes a "doubtful" account. Companies and banks keep a cash reserve for these accounts, which is a contra account to the loan or receivable account. Once an account is deemed uncollectible, it must be written off.

  1. Contra Account

    An account found in an account ledger that is used to reduce ...
  2. Allowance For Doubtful Accounts

    A contra-asset account that records the portion of a company's ...
  3. Bad Debt

    A debt that is not collectible and therefore worthless to the ...
  4. Charge-Off

    A term describing an expense on a company's income statement. ...
  5. Write-Off

    A reduction in the value of an asset or earnings by the amount ...
  6. Liability

    A company's legal debts or obligations that arise during the ...
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