Using the aging of receivables method, an unadjusted Allowance for Doubtful Accounts will have a debit balance when the amount of write offs recorded during the period is greater than the amount estimated to uncollectible in the prior accounting period.
The aging of receivables method is a method of accounting for Allowances for Doubtful Accounts whereby the ages of uncollected receivables are indicated in order to assess the accounts that are past due to be treated as uncollectible allowances.
An entity can adopt either the aging method or the percentage method to estimate the amount of its uncollectible accounts.
Thus, the unadjusted Allowance for Doubtful Accounts will have a debit balance when the amount of write offs recorded during the period is greater than the amount estimated to uncollectible in the prior accounting period.
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