Book Debts
Book debts are the amounts outstanding at a given date and owing to a trader by his customers as shown by the books of account. It refers to balances due from customers to whom we have sold goods or rendered any service on credit. It is a book that contains a list of debtors owing to a particular entity or company. It is the term used for sums of money owed to the bankrupt, partnership or company at the date of the insolvency order, usually for goods or services supplied or work carried out. It is a sum of money due to a business in the ordinary course of its business.
Book debts include sums owed to a business for goods or services supplied or work carried out. It comes on the asset side of the balance sheet. Sums due under loans may also be treated as book debts. It is an interesting question as to whether ‘book debts’ include within their scope the credit balances on a company’s accounts with its bankers. Book Debts Insurance covers the cost of reproducing records and chasing debtors following the destruction of accounting records following an event.
Book debts are assets of an enterprise. It has been described as a debt that would normally be entered in the books of the business regardless of whether or not it is in fact entered. There are three types of debts: Good debt, doubtful debt, and bad debt.
