It is useful to examine both the mean and standard deviation of the beginning-allowance-to-write-offs ratio over a period of several years. The mean can be compared to the benchmark figure of one to ...

One item for this allowance for a doubtful accounts adjusting entry is "uncollectible receivables." Businesses use historical data to estimate how much to reserve for uncollectible accounts.

Debit "allowance for doubtful accounts" in a journal entry in your accounting records by the amount of the uncollectible invoice. A debit reduces this account.

Allowance for credit losses is an estimation of the outstanding payments due to a company that it does not expect to recover.