Under the direct write-off method,recording an estimate of future uncollectible accounts includes a debit to Bad Debt Expense and a credit to the Allowance for Uncollectible Accounts.

Question

Quizplus · Accepted Answer

Under the direct write-off method, uncollectible accounts are not estimated and no allowance account is used. Instead, when a specific account is determined to be uncollectible, the Bad Debt Expense is recorded and Accounts Receivable is directly reduced.

Under the Direct Write-Off Method,recording an Estimate of Future Uncollectible