| A | B |
|---|
| Uncollectible account | An Accounts Receivable account that cannot be collected |
| Writing off an account | Canceling the balance of a customer account because the customer does not pay |
| Allowance for Uncollectible Accounts | Contra asset account for Accounts Receivable |
| Uncollectible Accounts Expense | Expense account used to record the expense incurred when an Accounts Receivable customer does not pay |
| Direct write-off method | Method of accounting for bad debts used by a business to remove from the accounting records an individual account determined to be uncollectible |
| Allowance method | Method used by a business to record the estimated uncollectible accounts expense in the same fiscal year as the related sales are recorded |
| Book value of accounts receivable | Difference between Accounts Receivable and Allowance for Uncollectible Accounts |
| Percentage of net sales | A method of estimating uncollectible accounts expense in which a business assumes that a certain percentage of each year’s net sales will be uncollectible |
| Aging of accounts receivable | A method of estimating the uncollectible accounts expense in which each customer’s account is classified by age, the age classifications are multiplied by certain percentages, and the total estimated uncollectible accounts are added to determine the end-of-period balance in Allowance for Uncollectible Accounts |
