Does a bad debt go into returns and allowances on a schedule C?

[bobdebiase]

Does Bad Debt go in Part I  line 2  on Sch C  or is it just taken off

of   gross receipts  on line 1   e.g.  bad debt is 3000 dollars

 gross receipts are  203,000 dollars     new gross receipts are

 200,000 dollars 

[DanielV01]

Answer "B" is more accurate.  You never received the money.  You would say it was a return if you received the money and then returned it (a refund, for example).