3 3 Bad Debt Expense and the Allowance for Doubtful Accounts Financial and Managerial Accounting
The actual payment behavior of customers, or lack thereof, can differ from management estimates, but management’s predictions should improve over time as more data is collected. On the balance sheet, an allowance for doubtful accounts is considered a “contra-asset” because an increase reduces the accounts receivable (A/R) account. The allowance for doubtful accounts is management’s […]