What is meant by accounts written off?

Accounts written off often refers to the accounts receivable that were deemed to be uncollectible and were removed from a receivable account in the general ledger. For example, a manufacturer may have written off an accounts receivable because a customer filed for bankruptcy and has insufficient assets. In this situation the account balance is written off with 1) a credit to Accounts Receivable, and 2) a debit to Allowance for Doubtful Accounts or Bad Debts Expense.

Banks, credit card companies, hospitals, and other organizations will also remove uncollectible accounts from their receivables and will refer to them as accounts written off.

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