Writing off an uncollectible account under the allowance method requires a debit to
A) Accounts Receivable.
B) Allowance for Doubtful Accounts.
C) Bad Debts Expense.
D) Uncollectible Accounts Expense.

Question

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Writing off an uncollectible account means recognizing the loss from the company's sales revenue. Under the allowance method, a contra-asset account called Allowance for Doubtful Accounts is used to estimate potential losses. When an account is determined uncollectible, it is removed from the Accounts Receivable balance and the same amount is also removed from the Allowance for Doubtful Accounts through a debit entry. This reduces the net realizable value of Accounts Receivable, reflecting a more accurate measure of the amount the company expects to collect. The Bad Debts Expense account is used for estimating and recording expected losses in the period when sales are made, not for writing off specific uncollectible accounts. The Uncollectible Accounts Expense is not a standard account in the accounting terminology.

Writing Off an Uncollectible Account Under the Allowance Method Requires