Accounts Receivable has a $3,450 balance,and the Allowance for Doubtful Accounts has a $300 credit balance.An $120 account receivable is written-off.Net receivables (net realizable value)after the write-off equals:
A)$3,030.
B)$3,150.
C)$3,270.
D)$3,330.

Question

Quizplus · Accepted Answer

A write-off is the act of removing an uncollectible account and its corresponding allowance from the accounting records.The entry includes a debit to Allowance for Doubtful Accounts (to decrease that contra-asset account)and a credit to Accounts Receivable (to decrease that asset account).Notice that the write-off decreased both the total Accounts Receivable and Allowance for Doubtful Accounts by the same amount ($120).Consequently,the net receivable balance after the write-off ($3,330 − $180 = $3,150)is unchanged from the net receivable balance before the write-off ($3,450 − $300 = $3,150).

Accounts Receivable Has a $3,450 Balance,and the Allowance for Doubtful