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What is the effect on the income statement when the allowance for uncollectible accounts is not established?

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Question added by Yazan Ahmad , programmer , wysada
Date Posted: 2017/01/04
Ahmed mohsen
by Ahmed mohsen , Senior Accountant , Main Poly Clinic

Without the balance sheet account, Allowance for Uncollectible Accounts, all of the accounts receivable are assumed to be collectible and there is no bad debt expense reported on the income statement until an account receivable is written off. This approach is known as the direct write-off method. (When an account is written off, the entry will be a debit to Bad Debt Expense and a credit to Accounts Receivable.)

Marlon Joseph Serrano
by Marlon Joseph Serrano , General Accountant , Oskar Phone LLC

The income will be Overstated.

Raheel Shafi
by Raheel Shafi , Accounts Officer , LS Industrial System (Electromec Engineering)

They will show as bad debit

Soliman Abd  ALmalak Gendy
by Soliman Abd ALmalak Gendy , مدير ادارة مراقبة حسابات , الجهاز المركزى للمحاسبات

Allowance for uncollectible accounts on income statement is:increasing the profit

Abdullah Aziz Eldain Morsi  Elgendy -        CMA  Candidate
by Abdullah Aziz Eldain Morsi Elgendy - CMA Candidate , Regional Receivable Accountant , Amiantit Group of Companies

there will not be  bad debt expense  in the income statement

Mohammed Omar Khan
by Mohammed Omar Khan , Chief Financial Officer , Mr. Raut P.G

It will increase the profit since it is uncollectible accounts.

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