Allowance for Doubtful Accounts
Filed Under: Business
1 definition found for this term.
Definitions are presented in the order source books were published (most recent first).
Source:
The estimated amount of accounts receivable that will not be collected (which are “doubtful”). The allowance, which is a contra account to accounts receivable, is used in order to recognize the bad debts expense related to such doubtful accounts but without removing those accounts from the books because the firm will still try to collect the amounts owing.