| I think you mean allowance for bad debt. Most people know what bad debt is, not collecting on an account. But if something never gets collected, this has to be taken care of on the books somehow, rather than just continually sitting in a receivable account forever. If something isn't collectible, it has no worth.
There are two different methods by which to record this. One is the direct write-off method, which pulls the receivable out for whatever account you're writing off and expensing it into Bad Debt Expense. But that method does not match the expense to the period in which the revenues happened, because the revenue from that receivable could have been last year or the year before. (Matching concept, which should have been learned when introduced to adjusting entries.) So the other method, the allowance method, matches the expense to the revenues. Since we don't yet know what accounts will be written off, it's an estimate.
Because it's only an estimate, we can't actually pull any accounts out of receivables -- we don't know who they are yet. We can only estimate a dollar amount. So we use the contra account, Allowance for Doubtful Accounts, to offset the balance in the receivables. (Receivables debit balance and allowance credit balance.) This then reduces the net balance of the receivables. (Done on the Balance Sheet.) So it reduces the value of the receivables without actually taking anything out of receivables.
At the end of every year, an adjusting entry is made to get the Allowance account back up to an estimated amount. Think of it as a place to "set aside" the amounts to be written off in the future. | 
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