What method should be used to write off invoices in a closed period for a client using accrual-basis reporting?

Using a credit memo is the appropriate method to write off invoices in a closed period when a client operates on an accrual-basis reporting system. This approach allows you to adjust the accounts receivable balance without impacting the revenue for that closed period, ensuring that your financial statements remain accurate.

When a credit memo is issued, it effectively reduces the amount owed by the customer and can reflect a decrease in sales or recognize any adjustments for returned goods, discounts, or bad debts. This method maintains the integrity of your financial records because it does not alter the existing transaction history, which is crucial for accrual accounting, where income and expenses are recognized when they are earned or incurred, regardless of when cash transactions occur.

Other methods, such as creating a zero-dollar sales receipt or making a journal entry, might lead to inaccuracies in revenue recognition or disrupt financial reporting for the closed period. The Write off invoices tool could be appropriate in certain contexts, but using a credit memo is specifically aligned with maintaining proper accrual-based accounting practices.