Allowance for uncollectible debts accounts

Also known as provision for doubtful debts account. This account is maintained to estimate and to create a provision for the amount of debts that would not be recovered or they would be become bad debts. The total amount of 'Allowance for doubtful debts account' (Balance c/d) is subtracted from Debtors or accounts receivable in balance sheet and the amount provision for doubtful debts account related to current financial period is reported in operating expenses in the income statement (also known as profit or loss a/c)




                                              Provision for doubtful debts account








Balance c/d







30,000
Balance b/c


Income statement (the current financial period provision)
20,000


10,000
Total
30,000
Total
30,000