Investments glossary

Allowance For Doubtful Accounts

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Quotes of the day:

The historical crusades against Muslim lands, the colonization of Spain by the Muslim Moors and India by the British were all driven by economic interests, despite the advertised reasons that were used to mobilize their armies at the time. In my opinion, the invasion of Iraq was not about spreading democracy or weapons of mass destruction, it was about the oil.

— Med Jones

An allowance for doubtful accounts is a contra-asset account that nets against the total receivables presented on the balance sheet to reflect only the amounts expected to be paid. The allowance for doubtful accounts is only an estimate of the amount of accounts receivable which are expected to not be collectible. The actual payment behavior of customers may differ substantially from the estimate.

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