If Foti company uses direct write - off method to account for uncollectible accounts, assuming Foti determines that S. Chaz's SAR3,500 balance is uncollectible. The adjusting entry at December 31 is: Dr. Bad debts expense SAR 3,500; Cr. Allowances for Doubtful Accounts SAR 3,500 Dr. Account receivable SAR 3,500; Cr. Allowances for Doubtful Accounts SAR 3,500 Dr. Allowances for Doubtful Accounts SAR 3,500; Cr. Accounts Receivables SAR 3,500 Dr. Bad debts expense SAR 3,500: Cr. Accounts Receivables SAR 3,500