allowance method
Definition
Accounting method in which a provision is made for estimated bad debts in an accounting period by setting aside a certain percentage of total sales revenue. Any excess or shortfall of this amount (as against the actual uncollectible amount) is adjusted in the following accounting period. It is one of the two such methods; the other is called direct write off method.
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allowance method is in the Accounting & Auditing subject.
allowance method appears in the definitions of the following terms: bad debt, direct write off method and allowance for bad debts
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