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Declining Balance Method and Direct Write-Off Method

Declining balance method


Common depreciation calculation system, which includes implementing the
depreciation rate against non-depreciated balance. Rather of spreading cost of asset evenly on its
life, such system expenses asset at the regular rate that outcomes in diminishing the depreciation
charges every successive period.
Direct Write-Off Method
Direct write-off method has been one of 2 most general accounting tools of bad debts
treatment. In direct write-off method, uncollectible accounts receivable have been straightly
written off against income at time while they have really been decided as the bad debts. While
debt has been decided as uncollectible, the journal entry has been passed in that bad debts
expense account has been debited along with accounts receivable account has been credited