When a particular account receivable is determined to be uncollectible, the journal entry to write off the account reduces net income.

Question

Quizplus · Accepted Answer

Writing off an uncollectible account receivable reduces the asset account and the allowance for doubtful accounts or bad debt expense account, but does not affect net income directly. It can indirectly affect net income through the adjustment of the allowance or bad debt expense account, but that depends on the accounting method used.

When a Particular Account Receivable Is Determined to Be Uncollectible