wxs1986

You set up an allowance first.

then you decrease it.

when you decrease the allowance - the flip side is a decrease due to doubtful accounts.

Accounts Receivable XXX
Doubtful Accounts (YYY)
Allowance for Doubtful accounts (YYY) <- This is the balancing entry for the line immediately above.


Balance sheet
Accounts Receivable XXX
Doubtful Accounts (YYY)
-------------------------------
Net Accounts Receivable XXX - YYY

Doubtful accounts (YYY) would be on the Asset side of the Balance sheet - shown immediately below the Accounts Receivable and then there would be a Net Accounts Receivable.

The Allowance for Doubtful accounts would show a Decrease year on year when this transaction is complete.

CP