Accounting for Uncollectible Accounts Receivable The Allowance Method This method is consistent with the matching principle Management makes an estimate each year of the portion of accounts receivable that may not be collectible Uncollectible Accounts Expense is debited and Allowance for Doubtful Accounts is credited Actual accounts that prove to be uncollectible are debited to Allowance for Doubtful Accounts and credited to Accounts receivable c7-6C7 - 6 Accounting for Uncollectible Accounts Receivable • This method is consistent with the matching principle. • Management makes an estimate each year of the portion of accounts receivable that may not be collectible. • Uncollectible Accounts Expense is debited and Allowance for Doubtful Accounts is credited. • Actual accounts that prove to be uncollectible are debited to Allowance for Doubtful Accounts and credited to Accounts Receivable. The Allowance Method