BO - C. Setup Account in the Chart of Accounts 1. Bad Debt Expense a) Account Type: b) Detail Type (Tax Form Section): 2. Allowance for Doubtful Accounts account if using allowance method a) Account Type: b) Detail Type(Tax Form Section): D. Create bad debt service item 1. Why? 2. What income account should you use? E. Create the credit memo for the amount of the write-off using the new service item F. Apply credit memo to customer (if automatic application off).