When an account becomes uncollectible and must be written off
A)Allowance for Doubtful Accounts should be increased.
B)Accounts Receivable should be decreased.
C)Bad Debt Expense should be decreased.
D)Sales Revenue should be decreased.

Question

Quizplus · Accepted Answer

When an account becomes uncollectible and must be written off, it means that the company has recognized that they are unable to collect the amount owed from the customer. Therefore, the company must decrease the balance of their Accounts Receivable since they will no longer be expecting to receive payment for that particular account. The Allowance for Doubtful Accounts and Bad Debt Expense accounts are used for estimating and recognizing potential uncollectible accounts, but they are not affected by the specific write-off of a single account. Sales Revenue is also not affected by the write-off of an uncollectible account.

When an Account Becomes Uncollectible and Must Be Written Off