Dillon Company uses the allowance method to account for bad debts. The entry to write-off a bad account (one that will never be collected) should be:
A) Option A
B) Option B
C)Option C
D)Option D

Question

Dillon Company uses the allowance method to account for bad debts. The entry to write-off a bad account (one that will never be collected) should be: 
A) Option A 
B) Option B 
C)Option C 
D)Option D

Quizplus · Accepted Answer

Option D represents the correct entry to write off a bad account using the allowance method. This entry reduces both the accounts receivable and the allowance for doubtful accounts by the same amount, reflecting the fact that the account is now considered uncollectible. Options A, B, and C all contain errors such as not reducing the allowance account or not specifying the customer account that is being written off.

Dillon Company Uses the Allowance Method to Account for Bad