why do accountants use allowance for doubtful accounts 
accounts use this method of estimating the allowance to adhere to the matching principle the matching principle states that revenue and expenses must be recorded in the same period in which they occur therefore the allowance is created mainly so the expense can be recorded in the same period revenue is earned the bottom linethe allowance for doubtful accounts is a general ledger account that is used to estimate the amount of accounts receivable that will not be collected a company uses this account to record how many accounts receivable it thinks will be lost the balance may be estimated using several different methods and management should periodically evaluate the balance of the allowance account to ensure the appropriate bad debt expense and net accounts receivables are being recorded 