When the allowance method is used,the entry to record the write-off of specific uncollectible accounts would decrease:
A)the Allowance for Doubtful Accounts account.
B)Net Income.
C)Accounts Receivable,Net.
D)Bad Debt Expense.

Question

Quizplus · Accepted Answer

When the allowance method is used and a customer account is written off,a decrease is recorded in Accounts Receivable,which is offset by a decrease in the contra-account,Allowance for Doubtful Accounts.The decrease in Accounts Receivable decreases total assets,while the decrease in the Allowance for Doubtful Accounts increases total assets.As a result,total assets do not change.A write-off does not affect liabilities,revenues,or expenses.

When the Allowance Method Is Used,the Entry to Record the Write-Off