Asked by Alexa Gonzalez on May 10, 2024
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Allowance for Doubtful Accounts is debited under the direct write-off method when an account is determined to be uncollectible.
Direct Write-off Method
An accounting method where bad debts are charged against income at the time they are determined to be uncollectible, rather than being estimated and accounted for in advance.
Allowance for Doubtful Accounts
An estimation of the amount of credit sales that are expected not to be collected, representing a reserve for potential bad debts.
- Understand the procedures for accounting the elimination of bad debts.
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Learning Objectives
- Understand the procedures for accounting the elimination of bad debts.
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