If a company uses the allowance method to account for uncollectible accounts, the entry to write off an uncollectible account only involves balance sheet accounts.

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When using the allowance method, the write-off of an uncollectible account involves only balance sheet accounts since the allowance for doubtful accounts (a contra-asset account) has already been established to account for potential losses. The entry will decrease the accounts receivable account (asset) and the allowance for doubtful accounts account (contra-asset).

If a Company Uses the Allowance Method to Account for Uncollectible