more-arw search

Q&A Forum

Where does bad debt expense show up on the Statement of changes in Net Assets - Non Profit accounting Fund accounting

Jacalyn Assink's Profile

We are recording an allowance for bad debt. We debit bad debt expense and credit a contra Revenue Account.

I an finding that we are rolling the bad debt expense into Contribution Revenue on the Statement of changes in Net Assets.

THis does't seem correct to me.


(Director Foundation Accounting) |
Victor Shah
Title: Account Manager
Company: FlowRocket, LLC
(Account Manager, FlowRocket, LLC) |


if you are allowing for bed debt and while debiting bed debt expense, if you credit contra revenue account, that increases your revenue and that is definitely not correct.

If there is an allowance of bed debt, there should be a reduction in Receivables or (Provision for reduction in receivables) because you are not expecting to receive that much money form your receivables and that is why you are allowing for bed debt.

Thus the credit should be Account Receivables (if it is actual bed debt) or Provision for Doubtful Debts (decreasing from Receivables Balance) when you debit Bed Debt Expense.

Let me know if this doesn't help or if you have any additional question.


Get Free Membership

By signing up, you will receive emails from Proformative regarding Proformative programs, events, community news and activity. You can withdraw your consent at any time. Contact Us.

Business Exchange

Browse the Business Exchange to find information, resources and peer reviews to help you select the right solution for your business.

Learn more

Contribute to Community

If you’re interested in learning more about contributing to your Proformative community, we have many ways for you to get involved. Please email to learn more about becoming a speaker or contributing to the blogs/Q&A Forum.