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What is a custom shop? Why does a custom shop use general-purpose equipment?
Allowance for Doubtful Accounts
An estimation of the amount of accounts receivable that may not be collected, used to reduce the overall accounts receivable value on the balance sheet.
Adjustment
A process of altering the value of accounts to more accurately reflect their true value at the end of an accounting period.
Balance Sheet Approach
A method of estimating an allowance for doubtful accounts based on the accounts receivable's ending balance, helping to present a more accurate picture of a company's financial health.
Allowance for Doubtful Accounts
An estimate of the amount of accounts receivable that may not be collectible, recorded as a contra asset account.
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