Allowance for doubtful accounts (ADA) - Financial definition
Financial acronyms
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Concise definition of the term allowance for doubtful accounts
The allowance for doubtful accounts is a reduction of the total amount of accounts receivable on a company’s balance sheet so that only the accounts receivable expected to be collected are reflected.
Comprehensive definition of the term allowance for doubtful accounts
The amount of the allowance represents the best estimate of the amount of accounts receivable that are considered bad debt and will not be paid by customers.