What entries should be made in the extended trial balance in respect of a confirmed bad debt?
A) Debit the income statement and credit the asset account
B) Debit the income statement and debit the asset account
C) Credit the income statement and credit the asset account
D) Credit the income statement and debit the asset account
E) None

Question

Quizplus · Accepted Answer

When a debt is confirmed as bad, it should be written off as an expense in the income statement, which is achieved by debiting the income statement. Simultaneously, the asset account (accounts receivable) is credited to reflect the reduction in assets due to the uncollectible amount.

What Entries Should Be Made in the Extended Trial Balance