Question

When using the direct write-off method off accounting for uncollectible receivables, the account Allowance for Doubtful Accounts is debited when a specific account is determined to be uncollectible. True or False

Answer 1

Answer:

False

Explanation:

Allowance for Doubtful Accounts account is a contra asset account. In this case it would lower the value Accounts Receivable account.

So when you use the write-off method for uncollectible receivables, the account Allowance for Doubtful Accounts is CREDITED. When an asset decreases, it should be credited.