Bad Debts Bad debts means that money which we could not acquire from our debtors . We may give the goods or money on credit to our debtors. Same debtor or debtors has to give us the money of his taken debt. But when will not give the debt, it will be the loss of our business , so, we have to pass the entry for bad debts like the entry of any other business loss. All losses account will be debited and any asset which will decrease, will be credited. In case of bad debt following journal entry will be passed. 1. Journal Entry for Bad Debts Loss For showing this journal entry, it is very necessary that a debt must be uncollectible. We have done all the efforts but we did not collect the debt. After failure of final notice to the debtor, we will convert our debt in bad debt. Bad Debt Account Debit Particular Debtor Account Credit Example : Shyam did not pay us our Rs. 5000 debt and Ram did not pay us our Rs. 10000 debt up to end of the financial ...