How To Close Out Allowance for Doubtful Accounts When The Customer Failed To Pay
Allowance for Doubtful Accounts that is an estimated for Bad Debt Expense that are closed at the end of accounting period if those customers who paid their payments on time for unpaid invoices. In the original entry there was credited to the allowance for doubtful accounts now debited to close it and credited the Accounts Receivable as shown below: Allowance for Doubtful Accounts a/c XXX Accounts Receivable a/c XXX (Close Allowance for Doubtful Accounts On Payment By Customers) The closing of allowance for doubtful accounts affects only Balance Sheet as there is decrease in Accounts...