A method for recognizing bad debts expense arising from credit sales. Under this method there is no allowance account. Rather, an account receivable is written-off directly to expense only after the account is determined to be uncollectible. This method is required for income tax purposes. See allowance method for bad debts expense on the income statements.
Featured Review
"I found myself taking on a new position in the office with my current employer after 15 years on the floor so to speak. I started looking for some bookkeeping courses from the the local college or school boards but found nothing helpful. Came upon AccountingCoach and I knew I could stop looking. Everything I needed was here, and it was free. I thought it was too good to be true, where's the catch? But there was none. The more I read the more I loved it. I signed up for the 'PRO' level so I could track my progress and see how well I was able to retain what I was learning. Thank you for this website. Keep up the good work, and I'll get back to my homework. Learning this way is fun." - Vic M.
Join PRO or PRO Plus and Get Lifetime Access to Our Premium Materials
Read all 2,645 reviewsWe now offer 10 Certificates of Achievement for Introductory Accounting and Bookkeeping: