1. To set up an allowance system for uncollectible accounts.

2. A method of accounting for uncollectible accounts in which an estimate is made of the amount of sales on account for which payment will not be received.

3. Selling goods on credit cause uncollectible accounts expense to customers who fail to pay their bills.

4. Based upon past experience, the uncollectible accounts expense is estimated at some percentage of net credit sales.

5. This approach of estimating uncollectible accounts receivable as a percentage of credit sales is easier to apply than the method of aging accounting receivable .

6. An alternative method, called the income statement approach, focuses upon estimating the uncollectible accounts expense for the period.

7. The larger the valuation allowance, the larger the current charge to uncollectible accounts expense.

8. At the end of each month, management should again estimate the probable amount of uncollectible accounts and adjust the Allowance for Doubtful Accounts to this new estimate.

9. This paper analyses the importance of undertaking unit totaling reserve for uncollectible accounts of receivable account in accounting.

10. A business with many accounts receivables will reasonably expect to have losses from uncollectible accounts.

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11. The term "net sales" shall mean gross sales less quantity iscounts and returns, but no deduction shall be made for cash or other iscounts or uncollectible accounts.

12. In the adjusting entry made by Solarwind Company at January 3, the amount of the adjustment ($10) was equal to the estimated amount of uncollectible accounts.

13. Under the allowance method, companies estimate the amount of the uncollectible accounts expense that will eventually result from a period's sale in order to reflect the expense during the same period.

14. The following schedule lists the group totals from the aging schedule and shows how the estimated total amount of uncollectible accounts is computed...

15. The most widely used method oil estimating the probable amount of uncollectible accounts is based upon an aging of the accounts receivable.