How to use the Allowance Method

In this video, I'm going to show you how to use the allowance method for accounting for bad debts. This is a common method that businesses use to estimate the losses from customers who don't pay their bills on time.

The allowance method involves two steps: first, we record an estimate of the uncollectible accounts at the end of each accounting period as bad debts expense and allowance for doubtful accounts. Second, we write off the actual uncollectible accounts when we determine they are not recoverable.

If you want to learn more about this topic or other accounting topics, check out my other videos on this channel.

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Thanks for watching and see you next time!

Jonathan M. Wild

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