under allowance method, we create a contra account by crediting
it with the estimated doublful amount. Thus accounts receivable are
reduced without having to credit this account.
it shows the true and fair view of the financial statements
because the doubtful amount is only the estimated amount and
therefore directly writing it off is not right.
The prudence and conservatism principle postulates that if
there is any probable expense, it need be immediately charged to
profit & loss account which is done under the allowance
method.