Gamer Inc.determines that it cannot collect $60 owed to it by its customer T.Jacobs.Gamer uses the direct write-off method.How would the company record this transaction?
A)Debit Bad Debt Expense for $60 and credit Accounts Receivable-T.Jacobs for $60.
B)Debit Allowance for Doubtful Accounts for $60 and credit Accounts Receivable-T.Jacobs for $60.
C)Debit Bad Debt Expense for $60 and credit Allowance for Doubtful Accounts for $60.
D)Debit Notes Receivable-T.Jacobs for $60 and credit Accounts Receivable-T.Jacobs for $60.
E)Debit Accounts Receivable-T.Jacobs for $60 and credit Notes Receivable-T.Jacobs for $60.

Question

Quizplus · Accepted Answer

The direct write-off method is used when a specific customer's account is deemed uncollectible. In this method, Bad Debt Expense is debited and Accounts Receivable-T.Jacobs is credited for the amount owed. Therefore, the correct choice is A.

Gamer Incdetermines That It Cannot Collect $60 Owed to It by by Its