Open Range Foods writes off a bad debt of $400 on a specific customer account. The journal entry for this transaction under the direct write off method would include:
A) a credit to Allowance for Doubtful Accounts.
B) a credit to Bad Debts Expense.
C) a debit to Bad Debts Expense.
D) a debit to Allowance for Doubtful Accounts.

Question

Quizplus · Accepted Answer

Under the direct write-off method, the journal entry to write off a bad debt includes a debit to Bad Debts Expense and a credit to Accounts Receivable for the specific amount.

Open Range Foods Writes Off a Bad Debt of $400