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

Question

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Under the direct write-off method, the doubtful account is not recorded until it is determined to be uncollectible. Therefore, there is no need to debit the Allowance for Doubtful Accounts account. Instead, the bad debt expense is debited and the accounts receivable account is credited directly when the account is deemed uncollectible.

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