Nigel Lighting uses the direct charge-off method of recording bad debts. On September 4, the company concluded that the $300 account balance of Louis Blue should be charged off. The entry to write off Blue's account will be:

Question

Quizplus · Accepted Answer

The direct charge-off method involves writing off specific accounts that are deemed uncollectible. The entry to write off Louis Blue's account would be to debit Uncollectible Accounts Expense for $300 and credit Accounts Receivable/Louis Blue for $300. Therefore, the correct choice is D. Option A is incorrect because it does not involve a debit to Uncollectible Accounts Expense. Option B is incorrect because it involves a credit to Allowance for Doubtful Accounts, which is not used in the direct charge-off method. Option C is incorrect because it involves a credit to Allowance for Doubtful Accounts, which is not used in the direct charge-off method.

Nigel Lighting Uses the direct Charge-Off Method of Recording Bad