Bad debt in accounting is considered an expense. There are two methods to account for bad debt: 1  Direct write off method (Non-GAAP) - a receivable which is not considered collectible is charged directly to the income statement. 2  Allowance method (GAAP) - an estimate is made at the end of each fiscal year of the amount of bad debt.
Differentiation looks to make a product more attractive by contrasting its unique qualities with other competing products. Successful product differentiation creates a competitive advantage for the seller, as customers view these products as unique or superior. Next Up.
Related Terms. Result of efforts to make a product or brand stand out as a provider of unique value to customers in comparison with its competitors. The company decided to lower its prices and hoped the cost differentiation would lure some customers away from their competitors. 24 people found this helpful.