What Is an Allowance for Bad Debt? An allowance for bad debt is a valuation account used to estimate the amount of a firm’s receivables that may ultimately be uncollectible. It is also known as an allowance for doubtful accounts. When a borrower defaults on a loan, the allowance for bad debt account and the
What Is an Allowance for Doubtful Accounts? An allowance for doubtful accounts is a contra account that nets against the total receivables presented on the balance sheet to reflect only the amounts expected to be paid. The allowance for doubtful accounts estimates the percentage of accounts receivable that are expected to be uncollectible. However, the
What Are Allowances? Allowances are a deviation from the basis grade or location allowable when delivering commodities under the terms of a futures contract. They are the permissible deviations in product quality and delivery location to the contract stipulations that are permitted before violating the terms of the futures contract. Key Takeaways Allowances are the
What is an All-Pay Auction An all-pay auction is an auction that requires all bidding participants pay their bid amount, regardless of whether they have placed the highest bid. BREAKING DOWN All-Pay Auction An all-pay auction game theory revolves around the idea of an auction where all participants are placing silent bids with the knowledge
What Is All Risks? “All risks” refers to a type of insurance coverage that automatically covers any risk that the contract does not explicitly omit. For example, if an “all risk” homeowner’s policy does not expressly exclude flood coverage, then the house will be covered in the event of flood damage. This type of policy
What Is All-Risks Coverage? All-risks coverage provides coverage for any incident that an insurance policy doesn’t specifically exclude. All-risks coverage, also called all-perils coverage, offers much broader protection than any named risks coverage. Named risks coverage only covers incidents the policy specifically includes. Key Takeaways All-risks coverage provides coverage for any incident that an insurance policy doesn’t
What Is Alpha? Alpha (α) is a term used in investing to describe an investment strategy’s ability to beat the market, or its “edge.” Alpha is thus also often referred to as “excess return” or “abnormal rate of return,” which refers to the idea that markets are efficient, and so there is no way to systematically
What Is Alt-A? Alt-A is a classification of mortgages with a risk profile falling between prime and subprime. They can be considered high risk due to provision factors customized by the lender. This type of loan tends to be more expensive for the borrower, as they may carry higher interest rates and/or fees. Key Takeaways
Investopedia / Michela Buttignol What Is Altcoin? Altcoins are generally defined as all cryptocurrencies other than Bitcoin (BTC). However, some people consider altcoins to be all crytocurrencies other than Bitcoin and Ethereum (ETH) because most cryptocurrencies are forked from one of the two. Some altcoins use different consensus mechanisms to validate transactions and open new
What Is an Alternate Beneficiary? An alternate beneficiary is a term used for the individual who is usually named in a will in the event that a person who is the named beneficiary refuses, disclaims or is unable to accept the inheritance. In an insurance policy, an alternate beneficiary is usually a secondary or contingent
