Jayson Enterprises uses the allowance method to account for uncollectible receivables.When an uncollectible account is written off,________.
A) the Bad Debt Expense account is debited
B) no entry is required because bad debt expense is estimated at the end of the accounting period
C) the write off has no effect on net income
D) the Allowance for Bad Debts account is credited

Question

Quizplus · Accepted Answer

When an uncollectible account is written off using the allowance method, it does not affect net income because the expense was already estimated and recorded in a prior period. The entry involves debiting the Allowance for Bad Debts and crediting Accounts Receivable.

Jayson Enterprises Uses the Allowance Method to Account for Uncollectible