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Direct Write-off Method
A method of accounting for bad debts where uncollectible accounts are directly written off against income at the time they are deemed non-collectable.
Uncollectible Account
A receivable that a company has not been able to collect from a debtor, leading to its recognition as a bad debt expense on the income statement.
Adjusting Entry
At the conclusion of an accounting cycle, journal entries are documented to distribute earnings and expenditures to the period in which they were genuinely incurred.
Bad Debts Expense
An expense reported on a company's income statement, representing the amount of non-collectable accounts receivable during a period.
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