Using the allowance method, when an account receivable is written off, the account to be debited is
A) accounts receivable.
B) bad debts expense.
C) allowance for doubtful accounts.
D) cash.

Question

Quizplus · Accepted Answer

When an account receivable is written off using the allowance method, the amount is debited to the allowance for doubtful accounts, reducing the balance in the account that was used to estimate potential bad debts. The accounts receivable account remains unchanged, as it was already reduced when the allowance was initially created. Choice A is incorrect, as accounts receivable is not affected by the write-off. Choice B is incorrect, as bad debts expense should have been recorded previously when the allowance was initially established, and is not affected by the subsequent write-off. Choice D is incorrect, as no cash transaction is involved in the write-off of a bad debt.

Using the Allowance Method, When an Account Receivable Is Written