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Bad debt


 Shiral
(@Shiral)
Joined: 1 month ago
Posts: 2
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Hi,

I'm asking about the difference between the direct write-off of a bad debt vs. the allowance method.

I know that under a bad debt expense, a specific invoice is being charged off against it, while under the allowance method only an estimate is being charged off.

I had two questions:

1. Besides the fact that the amount netted against receivables may vary accordingly, there is no other difference regarding effect on AR, correct?

2. Is it the same journal entry for both? What is the journal entry for either?

Thanks for your time.


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