Allowance for Uncollectible Accounts

Home » CMA Glossary Term » Financial Statements and Reporting » Allowance for Uncollectible Accounts

Allowance for Uncollectible Accounts is a contra-asset account on the balance sheet that estimates the portion of accounts receivable expected to be uncollectible. This provision reflects anticipated credit losses, ensuring that financial statements present a more accurate view of a company’s financial health. Understanding what is allowance for uncollectible accounts is crucial for assessing a company’s credit risk management and financial reporting accuracy.

CMA Exam Academy 16-Week Accelerator Program