The Bad Debt Expense Calculator estimates the amount of credit sales a business expects not to collect during a specific accounting period. This is essential for matching revenues with expected losses and complying with accrual-based accounting practices.

The calculator uses the Percentage of Credit Sales Method, where a fixed percentage—based on historical data or industry standards—is applied to total credit sales to estimate bad debts. This helps businesses recognize potential losses early and report a more accurate net income.

It is commonly used in preparing income statements and managing accounts receivable risk.

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