Allowance for Doubtful Accounts
/əˈlaʊəns fər ˈdaʊtfəl əˈkaʊnts/
Definitions
- (n.) An accounting provision that estimates the amount of accounts receivable unlikely to be collected, recognized to comply with the principle of conservatism in financial reporting.
The company increased its allowance for doubtful accounts to reflect the rising risk of customer defaults.
Forms
- allowance for doubtful accounts
- allowance for doubtful account
- allowances for doubtful accounts
Related terms
See also
Commentary
Use this term in financial and legal contexts related to debt recovery and creditor rights; precise estimation affects reporting accuracy and legal assessment of credit risk.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.