How To Account For Bad Debt In Quickbooks. To do this step, you will need to click on “accounting” then click on “chart of accounts” next you will click on the green “new” button near the top right of the screen. Create an expense account called 'bad debt' 2.

Set up a new customer called afda. Bad debt expenses are generally classified as a sales and general administrative expense and are found on the. Click on the gear icon and select chart of accounts.