The term used for the amount of accounts receivable expected to be uncollectible is recorded as which of the following?

• A. Allowance for Doubtful Accounts
• B. Provision for Bad Debt
• C. Bad Debt Expense
• D. Write-Off

Answer: (C)

Estimating uncollectible accounts is handled by recognizing a loss in the income statement and creating a reserve on the balance sheet. The amount you expect to be uncollectible is recorded as Bad Debt Expense for the period, and the offset goes to an Allowance for Doubtful Accounts, which reduces Accounts Receivable to its net realizable value. This separation lets you show the anticipated losses now while keeping receivables reported at what you realistically expect to collect. When a specific account is later deemed uncollectible, you write it off against the allowance, not by re-recording the expense. Some contexts use the term Provision for Bad Debt for the same purpose as the allowance, but the expense recognized in the period—the amount of expected uncollectibles—is Bad Debt Expense.