Use the allowance method to account for uncollectible accounts
-Bad Debts Expense is debited when writing off customer accounts under the Allowance method.

Question

Quizplus · Accepted Answer

Under the allowance method, Bad Debts Expense is debited when estimating the amount of uncollectible accounts, not when individual customer accounts are written off. When writing off an account, Allowance for Doubtful Accounts is debited, and Accounts Receivable is credited.

Use the Allowance Method to Account for Uncollectible Accounts