There are two ways to write off a bad account receivable. One is the direct write-off method and the other occurs under the allowance method.

Under the write off bad debt in QuickBooks method, a company writes off a bad account receivable after the specific account is found to be uncollectible. This writes off usually occurs many months after the account receivable and the credit sale were recorded. The entry to write off the bad account will consist of

1) a credit to Accounts Receivable in order to remove the amount that will not be collected, and

2) a debit to Bad Debts Expense to report the amount of the loss on the company's income statement.

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