Marla is a customer of Smiths, Inc. Her current balance due is $2,430. It has been determined that she defaulted on her account. If the company uses the direct write-off method, what entry is necessary to write off the $2,430?

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The direct write-off method involves recognizing bad debt expense only when a specific account is deemed uncollectible. In this case, Marla's account has been determined to be in default, meaning it is unlikely that Smiths, Inc. will be able to collect the $2,430 owed. Therefore, the entry necessary to write off the amount would be to debit Bad Debt Expense and credit Accounts Receivable/Marla.

Marla Is a Customer of Smiths, Inc