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  2. Allowance An allowance in accounting refers to an estimated amount set aside to account for future expenses, potential losses, or reductions in asset values. Allowances are used to create a more accurate representation of a company’s financial position by anticipating future events that may impact the financial statements.
    www.superfastcpa.com/what-is-an-allowance-in-ac…
    An allowance is a reserve that is set aside in the expectation of expenses that will be incurred at a future date. The creation of a reserve essentially accelerates the recognition of an expense into the current period from the later period in which it would otherwise have been recognized.
    www.accountingtools.com/articles/allowance
    allowance An accounting term used to describe entries on a profit and loss statement for expenses that might become necessary in the future. Examples include an allowance for bad debt, in which a certain percentage of income is deducted because of the likelihood it will be uncollectible.
    financial-dictionary.thefreedictionary.com/allowance
     
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