Allowance for Doubtful Accounts: Methods of Accounting for
In the case of the allowance for doubtful accounts, it is a contra account that is the allowance for doubtful accounts is a contra asset account that equals used to reduce the Controlling account, Accounts Receivable. It is important to consider other issues in the treatment of bad debts. This variance in treatment addresses taxpayers’ potential to manipulate when a bad debt is recognized. Then all of the category estimates are added together to get one total estimated uncollectible...