Under the allowance method of recording uncollectible accounts, the entry to write off an account does not affect net income or total assets.

Question

Quizplus · Accepted Answer

When an account is written off under the allowance method, it involves a debit to the Allowance for Doubtful Accounts and a credit to Accounts Receivable, which only affects the balance sheet accounts without impacting net income or the total assets, as the expense was previously recognized when the allowance was established.

Under the Allowance Method of Recording Uncollectible Accounts, the Entry