When using the allowance method,Allowance for Bad Debts is debited when an account receivable is written off.

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When using the allowance method, the Allowance for Bad Debts account is used to estimate and record potential losses from uncollectible accounts. When an account is deemed uncollectible and written off, the accounts receivable account is debited and the Allowance for Bad Debts account is credited. This reflects the reduction in assets and the recognition of the estimated loss on the income statement.

When Using the Allowance Method,Allowance for Bad Debts Is Debited