The direct write-off method requires an entry with a credit to Accounts receivable to record the Bad debts expense.

Question

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The direct write-off method involves recording the Bad debts expense by directly reducing the Accounts receivable account. This is done by debiting the Bad debts expense account and crediting the Accounts receivable account. Therefore, the statement "the direct write-off method requires an entry with a credit to Accounts receivable to record the Bad debts expense" is false.

The Direct Write-Off Method Requires an Entry with a Credit