Town and Country Saddle learns the account receivable for a customer is uncollectible. The journal entry under the allowance method to write off an account is to:
A) debit Allowance for Doubtful Accounts; credit Bad Debts Expense.
B) debit Sales; credit Allowance for Doubtful Accounts.
C) debit Bad Debts Expense; credit Accounts Receivable.
D) debit Allowance for Doubtful Accounts; credit Accounts Receivable.

Question

Quizplus · Accepted Answer

The correct journal entry to write off an account under the allowance method is to debit the Allowance for Doubtful Accounts and credit Accounts Receivable. This reflects the reduction in both the allowance account and the accounts receivable balance without impacting the income statement at the time of the write-off.

Town and Country Saddle Learns the Account Receivable for a Customer