Definitions for "Allowance for doubtful accounts"
An estimated amount of bad debts, to be subtracted from a balance sheet's accounts receivable.
A reserve for accounts receivable that may not be collectable. The allowance is always shown as a reduction from gross receivables used to calculate net receivables. An example of a contra-asset account.
Amounts deducted from total accounts receivable balance in order to recognize that some customers will not pay their debt