Under the allowance method, what is the entry to write off a specific uncollectible account?

• A. Debit Allowance for Doubtful Accounts; Credit Accounts Receivable
• B. Debit Bad Debt Expense; Credit Accounts Receivable
• C. Debit Cash; Credit Revenue
• D. Debit Accounts Receivable; Credit Cash

Answer: (A)

In the allowance method, uncollectible amounts are written off by using the contra-asset allowance to remove the receivable. When a specific account is deemed uncollectible, you debit the Allowance for Doubtful Accounts and credit Accounts Receivable. This reduces the AR balance and also reduces the allowance, reflecting that asset now is no longer expected to be collected. Because the bad debt expense was estimated earlier and recorded through the allowance, the write-off does not hit current-period income again.

Options that debit Bad Debt Expense would apply under a direct write-off approach, not the allowance method. Debiting Cash or crediting Revenue would imply a collection or revenue recognition, which isn’t the case for a write-off. Debiting Accounts Receivable would increase assets, which doesn’t align with removing a bad debt.