Accounting Glossary

Write-Off

Definition

The removal of an uncollectible account receivable or worthless asset from the books. Under the direct write-off method, the bad debt expense is recorded when the account is determined to be uncollectible.

Example

When a customer's $2,000 account is determined uncollectible: Debit Bad Debt Expense $2,000 / Credit AR $2,000.

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