Bad Debt Expense
Recall that we mentioned that revenues are presented as net sales or net revenues on the income statement. This is because bad debt expense is being netted against gross revenues, and the income statement simply represents the consolidated line item as revenues, net of bad debt expense.
In the Real WorldMicrosoft recorded net revenues of $36,835 million in 2004. Per the company’s footnotes, we discover: Bad Debt Expense = $44m Gross Revenues = $36,835m + $44m = $36,879m |
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