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There are two methods of accounting for uncollectible receivables:(i) direct write-off method, and allowance method. Under the direct write-off method, when a company determines an account to be uncollectible, it charges it to bad debt expense which reports actual losses. Whereas the allowance method, estimates the uncollectible accounts at the end of each period using the allowance for doubtful accounts. The write-off of a receivable result in a debit to the allowance for doubtful accounts and credit to accounts receivable. If a company recovers an uncollectible account, it reverses the write-off and records the collection of cash.