When the direct write-off method is used:
A)the estimated amount of bad debts is debited to Bad Debt Expense.
B)the estimated amount of bad debts is debited to Allowance for Doubtful Accounts.
C)the estimated amount of bad debts is debited to which account Accounts Receivable.
D)bad debts are not estimated.

Question

Quizplus · Accepted Answer

When the direct write-off method is used,the company records Bad Debt Expense only when a company writes off specific accounts.As a result,an estimate of uncollectible accounts is not recorded and the company would not have an Allowance for Doubtful Accounts account.

When the Direct Write-Off Method Is Used