When an account is written off under the allowance method:
A)accounts receivable decreases.
B)bad debt expense is increased.
C)accounts receivable remains unchanged.
D)accounts receivable increases.

Question

Quizplus · Accepted Answer

When an account is written off under the allowance method, accounts receivable decreases to reflect that payment is no longer expected for that particular account. Bad debt expense has already been recognized in a previous accounting period when the allowance for doubtful accounts was established.

When an Account Is Written Off Under the Allowance Method