When the allowance method of recognizing losses from uncollectible accounts is used, the entry to record the write-off of a specific account consists of a debit to
A)Accounts Receivable and a credit to Allowance for Doubtful Accounts.
B)Uncollectible Accounts Expense and a credit to Accounts Receivable.
C)Allowance for Doubtful Accounts and a credit to Accounts Receivable.
D)Uncollectible Accounts Expense and a credit to Allowance for Doubtful Accounts.

Question

Quizplus · Accepted Answer

The entry to write off a specific uncollectible account under the allowance method involves decreasing Accounts Receivable (since it is no longer expected to be collected) and the corresponding credit to the previously established Allowance for Doubtful Accounts (to reflect the fact that the allowance has been used to cover the loss). Therefore, the correct answer is C, which shows a debit to Allowance for Doubtful Accounts and a credit to Accounts Receivable. Options A and B are incorrect because they reverse the debits and credits. Option D is incorrect because it shows a debit to Uncollectible Accounts Expense, which would have been recorded earlier when estimating the expected losses and increasing the allowance.

When the Allowance Method of Recognizing Losses from Uncollectible Accounts