Allowance Method for Uncollectible Accounts

The allowance for uncollectible accounts method is used to estimate the bad debt expense required to reflect uncollectible accounts receivable at the end of an accounting period. The method complies with the matching principle and for this reason is preferred over the direct write off method.

Last modified July 16th, 2019 by Michael Brown
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Bad Debt Recovery – Allowance Method

A business had previously written off a bad debt of 2,000 using the allowance method for bad debts, but has now managed to make a bad debt recovery and has received 900 in part payment of the account.

Last modified July 16th, 2019 by Michael Brown
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Allowance Method For Bad Debt

A business uses the allowance method when accounting for bad debt, and has decided that a debt from a customer of 2,000 is not recoverable and needs to be recorded as a bad debt.

Last modified July 16th, 2019 by Michael Brown
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