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brentyg1
Sep 11, 2009, 05:46 AM
Would bad debt expense be included in the general and administration section or other income (expenses) on a multi step income statement?

ROLCAM
Sep 11, 2009, 06:40 AM
I would prefer the latter.

brentyg1
Sep 11, 2009, 09:41 AM
I was told it usually falls in selling expenses?

morgaine300
Sep 11, 2009, 11:41 PM
In the U.S. bad debt expense does not belong in the "other" section. It's a selling & admin expense.

As for falling specifically under selling -- I doubt there's a rule on something like that. I look at it as the expense of not being able to collect on a debt, which I consider to be an administrative duty. I consider selling expenses to be those which are related to the process of selling itself. But that's my opinion.