Under the specific charge-off method, a deduction for a bad debt is taken when the debt is determined to be worthless.

Name: Under the specific charge-off method, a deduction for a bad debt is taken when the debt is determined to be worthless.
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The specific charge-off method requires that a deduction for a bad debt is taken when the debt is determined to be worthless. This is different from the allowance method, which allows for the establishment of a reserve for bad debts based on estimated losses.

Under the Specific Charge-Off Method, a Deduction for a Bad