Mind helping with the meaning of the following sentence? the text below is extracted from Wikipedia and is about ' bad debt'. the term is explicitly definde but I still don't get the part comprising '

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Mind helping with the meaning of the following sentence? the text below is extracted from Wikipedia and is about ' bad debt'. the term is explicitly definde but I still don't get the part comprising 'crediting' * the debt is immediately written off by crediting the debtor's account, eliminating any balance remaining there. the crediting represents a loss to the creditor.

Sep 20, 2012 7:00 PM

Answers · 10

It's an accounting term which means to assign money to an account. In an accounting equation, a "credit" is balanced by a "debit" (loss) somewhere else, in this case from a creditor. In a bad debt, the credit is given to the debtor without actual money changing hands.

September 20, 2012