Part 1: Uncollectible Accounts Estimate vs. Write-offs Chapter 7 presents two main steps to account for uncollectible customer accounts - the uncollectible accounts estimate and the write-off of accounts that are deemed uncollectible. Read each characteristic below and check the appropriate box indicating the relevant process. Write-off Uncollectible Accounts Estimate Recorded as a year-end adjustment Decreases accounts receivable Recorded when a customer files for bankruptcy Increases expenses Decreases net income The specific customer and dollar amount are known Fulfills the matching principle Recorded any time during the year Increases the allowance for doubtful accounts Decreases the allowance for doubtful accounts Does not impact the financial statement totals Represents the company's best guess of the amount that will be uncollectible # Totals 6 6 6