The following information is from the records of Mountainview Camera Shop: $$\begin{array} { | l | l | }
\hline \text { Accounts receivable, December 31, 2018 } & \$ 81,000 \text { (debit) } \
\hline \text { Net credit sales for 2018 } & 161,000 \
\hline \text { Accounts written off as uncollectible during 2018 } & 15,000 \
\hline \text { Cash sales during 2018 } & 45,000 \
\hline
\end{array}$$ The company uses the direct write-off method for bad debts.What is the amount of bad debts expense?
A) $81,000
B) $45,000
C) $65,000
D) $15,000

Question

The following information is from the records of Mountainview Camera Shop: $$\begin{array} { | l | l | } 
\hline \text { Accounts receivable, December 31, 2018 } & \$ 81,000 \text { (debit) } \
\hline \text { Net credit sales for 2018 } & 161,000 \
\hline \text { Accounts written off as uncollectible during 2018 } & 15,000 \
\hline \text { Cash sales during 2018 } & 45,000 \
\hline
\end{array}$$ The company uses the direct write-off method for bad debts.What is the amount of bad debts expense?
A) $81,000
B) $45,000
C) $65,000
D) $15,000

Quizplus · Accepted Answer

Under the direct write-off method, the bad debts expense is equal to the amount of accounts written off as uncollectible during the year, which is $15,000.

The Following Information Is from the Records of Mountainview Camera