Which term refers to accounts receivable that are uncollectible?

• A. Cash Receipts
• B. Current Liabilities
• C. Bad Debts
• D. Corporation

Answer: (C)

Uncollectible accounts receivable are called bad debts. This term names amounts owed by customers that aren’t expected to be collected. In practice, businesses estimate some losses and record bad debt expense and an allowance for doubtful accounts to reflect the anticipated write-offs; when a specific receivable is written off, accounts receivable is reduced (often against the allowance) rather than recognizing a new expense. The other options don’t describe uncollectible receivables: cash receipts are money collected, current liabilities are obligations due within a year, and corporation is a type of business entity.