When the allowance method is used,the entry to record the write-off of specific uncollectible accounts would decrease
A)the allowance for doubtful accounts.
B)net income.
C)the net realizable value of accounts receivable.
D)bad debt expense.

Question

Quizplus · Accepted Answer

When the allowance method is used, the write-off of specific uncollectible accounts decreases the allowance for doubtful accounts. This is because the allowance for doubtful accounts was previously established to estimate the amount of uncollectible accounts, and when a specific account is deemed uncollectible and written off, the allowance for that account is no longer needed. The net realizable value of accounts receivable and bad debt expense were already affected when the allowance was established and would not be further impacted by the write-off of a specific account. Net income would also not be impacted by the write-off of a specific account.

When the Allowance Method Is Used,the Entry to Record the Write-Off