When there is an increase in a provision for bad debt,the amount of the increase is included as an expense on the income statement

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An increase in provision for bad debt is recognized as an expense on the income statement as it reduces the net income or profit of the company. This is because the provision for bad debts is an accounting estimate that reflects the management's expectation of future credit losses, and a higher provision indicates a higher level of uncertainty in collecting outstanding accounts receivable from customers. As a result, the increase in bad debt provision reduces the amount of net accounts receivable reported on the company's balance sheet and lowers its asset turnover ratio, which is a measure of how efficiently a company uses its assets to generate revenue.

When There Is an Increase in a Provision for Bad