Final answer:
The term for a customer account that is not expected to be collected is 'uncollectible.' Banks account for such potential losses in their financial planning, anticipating some loan defaults, which are factored into their balance sheets and annual expenses.
Step-by-step explanation:
A customer account that is not expected to be collected is referred to as a bad debt or uncollectible account.
Banks prepare for the inevitability that some loans will not be repaid by factoring in these missing payments into their annual expense calculations. The loans on a bank's balance sheet are assessed with an implied risk level to account for the potential that some customers will default on their loans. If defaults exceed the expected number, perhaps due to an economic downturn, this can lead to a significant impact on the bank's financial stability. An example cited illustrates that if a bank, like the Safe and Secure Bank, experienced a reduction in the value of its loans from $5 million to $3 million due to a surge in loan defaults, the bank could end up with a negative net worth.