A company uses the direct write-off method.The company writes off a $3,000 customer account balance when it becomes clear that the particular customer will never pay.What is the journal entry that would be prepared to record this write-off?
A)Debit Bad Debt Expense and credit Accounts Receivable for $3,000.
B)Debit Allowance for Doubtful Accounts and credit Bad Debt Expense for $3,000.
C)Debit Bad Debt Expense and credit Allowance for Doubtful Accounts for $3,000.
D)Debit Accounts Receivable and credit Bad Debt Expense for $3,000.

Question

Quizplus · Accepted Answer

When the direct write-off method is used,the entry to record a write-off includes a debit to Bad Debt Expense and a credit to Accounts Receivable.

A Company Uses the Direct Write-Off Method