Accounts Receivable Bad Debt Expense (Using Aging Schedule For Uncollectible Accounts)

Accounting for the valuation of accounts receivable (bad debt expense), bad debt (uncollectible debt) using an accounts receivable aging schedule, accounts receivable probability of its collection based on estimates of percentage of receivables (without identifying specific accounts), using past experience can estimate as a composite rate or setup an aginging schedule for accounts receivable to estimate uncollectibles based on various age categories (probability of collection), aging schedule classifies the accounts receivable for each customer based on the number days the receivable is outstanding, then each classification amount of receivables is multiplied by the estimated percentage of uncollectible amount to determine the required balance for the allowance for doubtful accounts (contra asset account to accounts receivable), using the allowance method the bad debt expense for the period is calculated based on the existing balance and the required balance for the allowance accoutnt (required balance - existing balance = bad debt expense), allowance method reports receivables on the balance sheet at net realizable value (amount to be received in cash), detailed accounting with calculations with (T accounts) by Allen Mursau