Using the direct write-off method, the bad debt expense that is recorded as a specific customer's account is determined to be noncollectible.
举一反三
- Bad debt expense is recorded when an account is determined to be uncollectible.
- The direct write-off method of accounting for bad debts records the loss from an uncollectible account receivable when it is determined to be uncollectible.
- In the direct write-off method. TechCom determines on January 23 that it cannot collect $5000 owed to it by its customer J. Kent. So it should make the following entry:Bad Debt Expense 5000 Accounts Receivable 5000
- The matching principle requires use of the direct write-off method of accounting for bad debts.
- Under the direct write-off method, the journal entry to record Uncollectible-Account Expense includes a credit to Accounts Receivable.