provision for doubtful debts

Similarly, if the debtors' personal accounts are retained at total amount due, a valuation account on the credit - provision for doubtful debts is required.

Accruing depreciation, stock valuations, provisions for doubtful debts, etc., are subjective judgements which make historic cost profit subjective.

The two methods are not mutually exclusive, and some businesses will have a provision for doubtful debts, writing off specific debts that they know to be bad (for example, if the debtor has gone into liquidation.)