When an uncollectible account is written off under the allowance method, the effect of the write-off is to

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Writing off an uncollectible account under the allowance method involves reducing both the allowance for doubtful accounts and accounts receivable by the amount of the write-off. This action does not affect net income, working capital, or the net realizable value of accounts receivable, but it does leave the total assets unchanged because it involves a reduction in both an asset (accounts receivable) and a contra-asset account (allowance for doubtful accounts), which offset each other.

When an Uncollectible Account Is Written Off Under the Allowance