Which of the following entries would be used to account for bad debts using the direct write-off method?
A)Accounts receivable is debited and Bad debts expense is credited.
B)Bad debts expense is debited and Allowance for doubtful debts is credited.
C)Bad debts expense is debited and Accounts receivable is credited.
D)Allowance for doubtful debts is debited and Bad debts expense is credited.

Question

Quizplus · Accepted Answer

The direct write-off method involves directly reducing Accounts receivable when a specific customer's debt is deemed uncollectible. Therefore, the entry would be to debit Bad debts expense (an expense account) and credit Accounts receivable (an asset account). Option A is incorrect because it credits Bad debts expense instead of debiting it. Option B is incorrect because it is the entry used under the allowance method, which estimates uncollectible debts instead of directly writing them off. Option D is also incorrect because it credits Bad debts expense instead of debiting it.

Which of the Following Entries Would Be Used to Account