When using the allowance method,year-end adjustments for uncollectible accounts expense must be made.

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The allowance method involves estimating uncollectible accounts and creating a contra asset account for the estimated amount (usually called "Allowance for Doubtful Accounts"). At the end of the period, an adjusting entry must be made to record the actual uncollectible accounts expense for the period based on the estimate. This is done by debiting the uncollectible accounts expense account and crediting the allowance for doubtful accounts account. The purpose of this adjustment is to ensure that the balance in the allowance account reflects a reasonable amount of uncollectible accounts based on the company's history and current economic conditions.

When Using the Allowance Method,year-End Adjustments for Uncollectible Accounts Expense