Examlex
The four layers of the atmosphere from the top down are:
Allowances for Doubtful Accounts
Allowances for doubtful accounts is a contra asset account used to estimate the portion of a company's receivables that may ultimately not be collectible.
Bad Debt Expense
Bad debt expense represents the loss that a company incurs when it is unable to collect receivables from customers who are unable to pay their debts.
Adjusting Entry
Refers to adjustments made in the books of accounts to record expenses or revenues that have occurred but are not accurately represented in financial statements.
Write Off
The act of removing an asset from the financial statements due to its impairment or irrelevance, recognizing it as a loss.
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