Accounts Uncollectible

What are 'Accounts Uncollectible'

Accounts uncollectible are 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.

RELATED TERMS
  1. Uncollected Funds

    The amount of a bank deposit that comes from checks that have ...
  2. Bad Debt Expense

    An entry found on a business's income statement that represents ...
  3. Non-Recourse Sale

    A transaction in which a creditor turns a bad debt over to a ...
  4. Average Collected Balance

    The average balance of collected funds (less any uncleared or ...
  5. Debtor

    A company or individual who owes money. If the debt is in the ...
  6. Contra Account

    An account found in an account ledger that is used to reduce ...
Related Articles
  1. Investing

    What's an Allowance for Doubtful Accounts?

    The allowance for doubtful accounts represents the percentage of the accounts receivable the company expects to write-off as uncollectible.
  2. Investing

    What are Receivables?

    Receivables are debts, transactions or other obligations owed to a company by its debtors or customers.
  3. Markets

    What's a Debtor?

    A debtor​ is an individual or company that owes money.
  4. Investing

    What is a Contra Account?

    A contra account is an offset that reduces the value of a related account.
  5. Investing

    Understanding Write-Offs

    Write-off has different meanings depending on the context in which it is used, but generally refers to a reduction in value due to expense or loss.
  6. Personal Finance

    Personal Loans: To Lend Or Not To Lend?

    Attempting to help a loved one with a cash loan can put a strain on your relationship - and your bank account.
  7. Investing

    The Importance Of Analyzing Accounts Receivable

    While investors often focus on revenues, net income, and earnings per share, they should not overlook the importance of analyzing accounts receivable.
  8. Investing

    What Is A Trading Account?

    A trading account enables an investor to buy and sell securities.
  9. Personal Finance

    The 5 Best Alternatives to Bank Saving Accounts

    Find out about some of the most profitable available alternatives to depositing money in a traditional bank passbook savings account.
  10. Managing Wealth

    Accountant: Job Description & Average Salary

    Discover what the job description of an accountant entails, along with education and training, salary and skills necessary for success.
RELATED FAQS
  1. How do debt collection agencies make money?

    Find out how a collection agency makes money, what rules it is bound by, and when it can take a pay check or garnish a bank ... Read Answer >>
  2. What effect did the Bankruptcy Abuse Prevention and Consumer Protection Act of 2 ...

    Credit card companies and banks hate deadbeats who take from their bottom lines. They especially dislike the Chapter 7 bankruptcy ... Read Answer >>
  3. Are debt collectors allowed to call me at work?

    Find out if and when it is all right for a debt collector to call a debtor at work and how the debtor can make it stop under ... Read Answer >>
  4. Can personal loans be included in bankruptcy?

    Read about debts that are dischargeable when filing for bankruptcy. Learn about how personal loans are treated when filing ... Read Answer >>
  5. Can a creditor sue me for a delinquent account?

    Learn what happens when an account is delinquent and read about the regulations that protect consumers who have delinquent ... Read Answer >>
  6. Why is the use of contra accounts so important for maintaining ledgers?

    Examine the role of contra accounts in financial accounting, including several examples of different contra accounts found ... Read Answer >>
Hot Definitions
  1. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
  2. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  3. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  4. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  5. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  6. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
Trading Center