In recording bad debt expense under the allowance method, which account is credited?

When recording bad debt expense under the allowance method, the Allowance for Doubtful Accounts is credited because this account is designed to anticipate potential losses from uncollectible accounts receivable. This method allows companies to match the estimated expense of bad debts with the revenues they recognize in the same period, adhering to the matching principle in accounting.

The credit to the Allowance for Doubtful Accounts creates a reserve for the estimated amount of accounts receivable that may not be collected. This reserve provides a more accurate reflection of the company's financial position by updating the value of accounts receivable on the balance sheet to account for potential losses.

In contrast, debiting Bad Debt Expense reflects the impact of these estimated losses on the income statement, providing a clear picture of the costs related to uncollectible accounts. The other options do not appropriately reflect the accounting treatment for bad debts under the allowance method.