Chapter 8, Problem 15RQ

To determine

Allowance method

Allowance method is a method for accounting bad debt expense, where uncollectible accounts receivables are estimated and recorded at the end of particular period.

Direct write-off method:

Under this method, accounts would be written off only when it is determined that the receivables from a customer remain uncollectible.

To identify: The account to be debited, at the time of writing off uncollectible under allowance method, and identify how it differs from direct write-off method.