Under the direct write-off method, the entry to write off an uncollectible amount will include ___
A debit to Bad Debts Expense Account
Under the direct write-off method, the entry to write off an uncollectible amount will include the following:
Debit: Bad Debt Expense
This account represents the expense incurred by the company due to non-payment of a debt.
Credit: Accounts Receivable
This account represents the amount that the company was expecting to receive from the customer but is now considered uncollectible.
The direct write-off method is a simple method of accounting for bad debts. Under this method, when a customer’s debt becomes uncollectible, the company directly writes off the amount as a bad debt expense. This method is not considered a GAAP (Generally Accepted Accounting Principles) method, and it is not permissible for financial reporting purposes.
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