Under The Allowance Method, Estimated Uncollectible Receivables Are Credited To What?

Under the Allowance Method, estimated uncollectible accounts receivables are credited to Allowance for Doubtful Accounts / Provision for Doubtful Debts as it is an estimation of total amount of sales made to customers that may be unpaid or remain uncollectible sales amount due to Bad Debt Expense as the customers may fail to pay on time or unable to pay due to insolvency.

Allowance for doubtful accounts is a contra asset account which is deducted from Accounts Receivable / Debtors on balance Sheet in order to calculate the net realizable value of accounts receivable.