1. Results in bad debt expense being increased during the period.

2. Results in bad debt expense being reduced for the period.

3. Because less of a bad debt expense provision will be needed next year due to the overstated allowance account, net income will be higher next period .

4. In this case, the overstatement of bad debt expense unjustifiably understates the present year's net income .

5. In addition, companies are required to make prudent estimates against revenues that are recorded but may not be received, called a bad debt expense .

6. Another aspect , it do not compete with to selling the period income matching each other in a bad debt expense .