On 1 January,Davidson Services has the following balances: $\begin{array}{l}
\text { Accounts receivable }\
\begin{array}{ll|l}
\hline \text { Bal }& \$ 23,000 & \
\hline
\end{array}
\end{array}$

$\begin{array}{l}
\text { Bad debts expense }\
\begin{array}{ll|l}
\hline \text { Bal }& \$ 0 & \
\hline
\end{array}
\end{array}$Davidson has the following transactions during January: Credit sales of $100,000,collections of credit sales of $85,000,and write-offs of $20,000.Davidson uses the direct write-off method.At the end of January,the balance in Bad debts expense is:
A)$23,529
B)$23,000
C)$20,000
D)$17,000

Question

On 1 January,Davidson Services has the following balances: $\begin{array}{l}
\text { Accounts receivable }\
\begin{array}{ll|l}
\hline \text { Bal }& \$ 23,000 & \
\hline
\end{array}
\end{array}$

$\begin{array}{l}
\text { Bad debts expense }\
\begin{array}{ll|l}
\hline \text { Bal }& \$ 0 & \
\hline
\end{array}
\end{array}$Davidson has the following transactions during January: Credit sales of $100,000,collections of credit sales of $85,000,and write-offs of $20,000.Davidson uses the direct write-off method.At the end of January,the balance in Bad debts expense is:
A)$23,529
B)$23,000
C)$20,000
D)$17,000

Quizplus · Accepted Answer

Under the direct write-off method, bad debts expense is recorded when specific accounts are deemed uncollectible. In January, Davidson wrote off $20,000, so the bad debts expense is $20,000.

On 1 January,Davidson Services Has the Following Balances Accounts receivable Bal $23,000\begin{array}{l}\text { Accounts receivable }\\\begin{array}{ll|l}\hline \text { Bal }& \$ 23,000 & \\\hline\end{array}\end{array} Accounts receivable Bal ​$23,000​​​​

On 1 January,Davidson Services Has the Following Balances $\begin{array}{l}\text { Accounts receivable }\\\begin{array}{ll|l}\hline \text { Bal }& \$ 23,000 & \\\hline\end{array}\end{array}$