Dalton Company uses the allowance method to account for uncollectible receivables. Dalton has determined that the Irish Company account is uncollectible. To write off this account, Dalton should debit
A) Bad Debt Expense and credit Accounts Receivable
B) Bad Debt Expense and credit Allowance for Doubtful Accounts
C) Allowance for Doubtful Accounts and credit Accounts Receivable
D) Accounts Receivable and credit Allowance for Doubtful Accounts

Question

Quizplus · Accepted Answer

When using the allowance method, the write-off of an uncollectible account involves debiting Allowance for Doubtful Accounts and crediting Accounts Receivable, which removes the specific uncollectible amount from the accounts receivable balance without affecting the income statement at the time of the write-off.

Dalton Company Uses the Allowance Method to Account for Uncollectible