Title: Describe the relationship between the Bad Debts Expense Account and Allowance for Uncollectible Accounts when recording bad debts.
Course: Accounting, Advanced (12104-II) > Section: Analyzing Notes/Accounts Payable and Receivable

Description of the relationship should include the following:

- Bad Debts Expense Account—an operating expense account that estimates the amount of credit sales or receivable balance unlikely to be collected during a given time period
- Allowance for Uncollectible Accounts—a contra-asset account that accumulates the expected future amount of bad debts as of a given date; it normally has a credit balance and offsets the Accounts Receivable Account