When using the allowance method of accounting for uncollectible accounts, the entry to record the bad debts expense is a debit to Bad Debts Expense and a credit to Accounts Receivable.

Question

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The entry to record the bad debts expense under the allowance method is a debit to Bad Debts Expense and a credit to Allowance for Doubtful Accounts, not directly to Accounts Receivable.

When Using the Allowance Method of Accounting for Uncollectible Accounts