How do you post the debt allowance in the income statement?
submitted by elln

Rathnanigans

Debt allowance is usually recorded as an expense under the "interest expense" or "debt allowance expense" line item in the income statement. You would recognize the allowance in the period it relates to, because it reflects the estimated cost of debt for that reporting period. This will lower your net income.

See: debtor's allowance

Mumbiquious Quips

You put the debt allowance as an expense on the income statement, usually under interest expenses. It shows up as a cost related to borrowing, which lowers your profit for that period.