An invoice that will not be collected comes off the receivables and is
deducted, the direct write-off method the owner chose (A-5; IRC
§166(a); Treas. Reg. §1.166-1(e), -2(a), -3(a); rules.md B-41).
Ledger::write_off posts one balanced entry, Dr 6990 Bad Debt Expense /
Cr 1200 Accounts Receivable, its receivable line tagged WriteOff so the
figures stay derived: what the invoice owes falls and what was written
off rises, and a reversal re-instates it without a new movement (D-49).
The amount is at most what is owed, and at most the least owed on any
day from the write-off's on: a later payment can't leave the invoice
owing less than nothing (B-38 INVARIANT 2). A partial write-off is
allowed, as §1.166-3(a) allows to the extent charged off. Cash-basis
books refuse it: an invoice never counted as income has no basis to
deduct (§1.166-1(e)). The bad_debts role (6990) is a control role, so
the account is created on demand and can be assigned like the others.
The same-year recovery D-49 records is a reversal of the write-off and
then a payment; a later year is a plain entry, and needs no movement.
Tests: half_paid_rest_written_off_is_written_off,
write_off_refused_on_cash_basis, write_off_above_outstanding_refused,
write_off_then_recovery_same_year.
swaits
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