Allowance for Doubtful Accounts is decreased under the direct write-off method when an account is determined to be uncollectible.

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Under the direct write-off method, the Allowance for Doubtful Accounts is not adjusted until a specific account is determined to be uncollectible and written off. Therefore, the allowance is not decreased unless a specific account is written off. It is important to note that the direct write-off method is not the preferred method of accounting for doubtful accounts, as it does not match expenses to revenue and can result in the distortion of financial statements. The allowance method is the preferred method, where estimated uncollectible accounts are recognized as a adjusting entry at the end of each period, regardless of whether a specific account is known to be uncollectible.

Allowance for Doubtful Accounts Is Decreased Under the Direct Write-Off