You are informed that Warren Hodges, one of your customers, has declared bankruptcy. Hodges has an account with your company with a current balance of $2,300. Using the allowance method, the entry to write off the uncollectible account involves:
A)a debit to allowance for doubtful accounts and a credit to the Hodges's account receivable.
B)a debit to Hodges's account receivable and a credit to bad-debt expense.
C)a debit to bad-debt expense and a credit to Hodges's account receivable.
D)a debit to Hodges's account receivable and a credit to allowance for doubtful accounts.

Question

Quizplus · Accepted Answer

The allowance method requires a debit to the allowance for doubtful accounts and a credit to the specific account receivable being written off, in this case, Hodges's account receivable.

You Are Informed That Warren Hodges, One of Your Customers