Which of the following entries would be used to account for bad debts using the allowance method?
A)Accounts receivable is debited and Bad debts expense is credited.
B)Bad debts expense is debited and Accounts receivable is credited.
C)Bad debts expense is debited and Allowance for doubtful debts is credited.
D)Allowance for doubtful debts is debited and Bad debts expense is credited.

Question

Quizplus · Accepted Answer

When using the allowance method to account for bad debts, the Bad debts expense is debited and the Allowance for doubtful debts account is credited. This helps to estimate the amount of accounts receivable that will ultimately be uncollectible. The Accounts receivable account is not directly affected in this entry.

Which of the Following Entries Would Be Used to Account