When a customer's balance is known to be uncollectible and a write off has occurred

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When a customer's balance is known to be uncollectible and is written off, the net effect on the income statement is indeed zero because the expense was already recognized when the allowance for doubtful accounts was adjusted. Accounts receivable decrease because the specific customer's balance is removed, but this does not impact revenues since the revenue was recognized at the time of sale, not at the time of write-off. Contra-asset accounts, specifically the allowance for doubtful accounts, decrease because the write-off reduces the allowance, and this action does not impact expenses for the same reason: the expense was recognized earlier when the allowance was adjusted.

When a Customer's Balance Is Known to Be Uncollectible and a Write