When using the direct write-off method of accounting for uncollectible receivables, the account Allowance for Doubtful Accounts is debited when a specific account is determined to be uncollectible.

Question

Quizplus · Accepted Answer

The direct write-off method does not use an allowance account. Instead, it directly reduces the accounts receivable balance when a specific account is determined to be uncollectible by debiting the bad debt expense account and crediting accounts receivable.

When Using the Direct Write-Off Method of Accounting for Uncollectible