Question

If the direct write-off method of accounting for uncollectible receivables is used, what general ledger account is credited when a customer's account is written off as uncollectible

Answer 1

Answer: Accounts Receivable account

Step-by-step explanation:

Normally, when writing off a bad debt, an allowance for doubtful debts account is created from which the bad debts can be written off. However, some use the direct method of writing off accounts receivable.

The direct method involves removing the bad debt from the Accounts receivable when it happens by crediting the Accounts Receivable account to reduce it and debiting the Bad Debt expense account.