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When writing off an uncollectible account using the direct write-off method, Bad Debts Expense is debited?


True or False.

538 day(s) ago

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mikebadj 		In recent days Bad Debt concept is not in existence. Now NPA i.e Non Performing Asset concept is running. So when an a/c turns to NPA and the same is found irrecoverable by any means of action, banks generally write off the a/c to make there balance sheet clean and to present it as lucrative form before the public/share holders.So to clear NPA a/c, banks directly debit it's profit head and to credit NPA a/c (Bad Debt)

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DougCPA 		True.

Bad Debt Expense is debited while the asset in question is credited using the direct write-off method.

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Question Title When writing off an uncollectible account using the direct write-off method, Bad Debts Expense is debited?
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