After adjustment,the balance in the Allowance for Doubtful Accounts has the effect of reducing Accounts Receivable to its estimated realizable value.

Allowance for Doubtful Accounts

A contra-asset account that represents the estimated amount of accounts receivable which may not be collected.

Estimated Realizable Value

The anticipated amount of money that an asset is expected to bring upon sale or disposition, after accounting for costs of sale or disposal.

Accounts Receivable

Accounts receivable are amounts owed to a company by its customers for goods or services delivered on credit but not yet paid for.