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No, it should not be considered an accounts receivable (A/R) if it has been determined the account is uncollectible. Once it is determined that the amount is uncollectible, steps must be taken to write the debt off as a bad debt. There are 2 methods of doing this: 1) Direct write-off method: Once the debt is determined to be uncollectible, the loss is recorded by debiting Bad Debt Expense and crediting A/R. or 2) Allowance Method: An estimate is made on the expected uncollectible accounts based on total sales made on credit/account or from total outstanding receivables. The estimate is entered as an expense and an indirect reduction in A/R through an allowance for doubtful accounts.
A/R is defined as claims held against customers and others for money, goods or services that are expected to be collected.
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