During the year,a company that uses the allowance method concludes that $6,844 of specific customer accounts will not be collected.These are written off by:
A)debiting Accounts Receivable and crediting Allowance for Doubtful Accounts for $6,844.
B)debiting Accounts Receivable and crediting Bad Debt Expense for $6,844.
C)debiting Bad Debt Expense and crediting Accounts Receivable for $6,844.
D)debiting Allowance for Doubtful Accounts and crediting Accounts Receivable for $6,844.

Question

Quizplus · Accepted Answer

When specific customer accounts are deemed uncollectible, they are written off by debiting the Allowance for Doubtful Accounts and crediting Accounts Receivable for the amount of the uncollectible accounts. This reduces the balance in Accounts Receivable to reflect the fact that the company no longer expects to collect that amount. Choice D reflects this process.

During the Year,a Company That Uses the Allowance Method Concludes