The following information is from the records of Armadillo Camera Shop: $\begin{array}{|l|l|}
\hline \text { Accounts receivable, } 31 \text { December } 2016 & \$ 85,000 \text { (debit) } \
\hline \text { Net credit sales for } 2016 & 160,000 \
\hline \text { Accounts written off as uncollectable during 2016 } & 15,000 \
\hline \text { Cash sales during 2016 } & 41,000 \
\hline
\end{array}$ The company uses the direct write-off method for bad debts.What is the amount of bad debts expense?
A)$15,000
B)$85,000
C)$60,000
D)$41,000

Question

Quizplus · Accepted Answer

Under the direct write-off method, bad debts expense is recognized when specific accounts are deemed uncollectible. Therefore, the amount of bad debts expense is the total accounts written off during the year, which is $15,000.

The Following Information Is from the Records of Armadillo Camera