You should now have learnt.
1. That debts we are unable to collect are called bad debts.
2. That bad debts are credited to the customer's account (to cancel them) and debited to a bad debts account.
3. That allowances for doubtful debts are needed, otherwide the value of the accounts receiveble in the statment of financial position will show too high a value, and could mislead anyone looking at the statment of financial position. Also, making a provision of this type allows for more accurate calculation of profits and losses.
4. That the allowance for doubtful debtd is calculted after bad debts have been deducted from the debtor balances.