When a company uses the allowance method of accounting for uncollectible receivables, which entry would not be found in the general journal?
A)
Bad Debt Expense $ \quad 500 $
Allowance for Doubtful Accounts $ \quad 500 $
B)
Bad Debt Expense $ \quad 500 $
Accounts Receivable, Bob Smith$ \quad 500 $
C)
$\begin{array}{l}
\begin{array} { l l }
\text { Cash } & 300 \
\text { Allowance for Doubtful Accounts } & 200
\end{array}\
\text { Accounts Receivable, Bob Smith } \quad 500
\end{array}$
D)
$ \begin{array}{ll}\text { Cash } & 500\end{array} $
Accounts Receivable, Bob Smith $ \quad 500 $

Question

When a company uses the allowance method of accounting for uncollectible receivables, which entry would not be found in the general journal?
A) 
Bad Debt Expense $ \quad 500 $
Allowance for Doubtful Accounts $ \quad 500 $
B) 
Bad Debt Expense $ \quad 500 $
Accounts Receivable, Bob Smith$ \quad 500 $
C) 
$\begin{array}{l}
\begin{array} { l l } 
\text { Cash } & 300 \
\text { Allowance for Doubtful Accounts } & 200
\end{array}\
\text { Accounts Receivable, Bob Smith } \quad 500
\end{array}$
D)
$ \begin{array}{ll}\text { Cash } & 500\end{array} $
Accounts Receivable, Bob Smith $ \quad 500 $

Quizplus · Accepted Answer

Option B is incorrect because under the allowance method, bad debt expense is recorded by increasing (debiting) Bad Debt Expense and increasing (crediting) Allowance for Doubtful Accounts, not by directly writing off Accounts Receivable.

When a Company Uses the Allowance Method of Accounting for Uncollectible