After adjustment,the allowance for doubtful accounts has the effect of reducing accounts receivable to its estimated realizable value.

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The allowance for doubtful accounts is a contra account to accounts receivable which reduces the value of accounts receivable to its estimated realizable value. This adjustment is made to account for the possibility that some of the outstanding receivables may not be collected.

After Adjustment,the Allowance for Doubtful Accounts Has the Effect of Reducing