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The direct write-off method only records an uncollectible account expense when an account has been determined to be uncollectible. This method is not recommended the recognition of the expense does always occur in the year the corresponding revenues were recorded. It has, however, the advantage of simplicity since no adjusting entry is necessary at the end of a financial period. The method is best used by businesses that do not have a large number of credit sales. In the event an account needs to be reinstated, the Accounts Receivable account is debited. Uncollectible Accounts Expense should be credited.
Journal entry to write off bad debts
| Debit | Credit | |
| Uncollectible Accounts Expense | XX | |
| Accounts Receivable | XX |
Journal entry to recover receivables
| Debit | Credit | |
| Accounts Receivable | XX | |
| Uncollectible Accounts Expense | XX |
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