A company uses the allowance method of accounting for bad debt.During 2001,an important customer became bankrupt and a related receivable of $6,400 was deemed uncollectible.The 2001 entry to record this event would be: $\begin{array}{|l|l|l|r|}
\hline1& \text { Bad debt expense..} & 6,400\
\hline &\text {Allowance for doubtful accounts... } &&6,400\
\hline2& \text { Loss on receivable.} & 6,400\
\hline&\text { Accounts receivable.} &&6,400\
\hline 3&\text { Bad debt expense.} & 6,400\
\hline &\text { Accounts receivable.} &&6,400\
\hline 4&\text { Loss on receivable.} &6,400\
\hline& \text {Allowance for doubtful accounts... } &&6,400\
\hline 5&\text {Allowance for doubtful accounts.. } & 6,400\
\hline &\text { Accounts receivable} & &6,400\
\hline
\end{array}$

Question

A company uses the allowance method of accounting for bad debt.During 2001,an important customer became bankrupt and a related receivable of $6,400 was deemed uncollectible.The 2001 entry to record this event would be: $\begin{array}{|l|l|l|r|}
 \hline1& \text {  Bad debt expense..} & 6,400\
\hline &\text {Allowance for doubtful accounts...  } &&6,400\
\hline2& \text {  Loss on receivable.} & 6,400\
 \hline&\text {  Accounts receivable.} &&6,400\
\hline 3&\text {  Bad debt expense.} & 6,400\
\hline &\text {  Accounts receivable.} &&6,400\
\hline 4&\text {  Loss on receivable.} &6,400\
\hline& \text {Allowance for doubtful accounts...  } &&6,400\
\hline 5&\text {Allowance for doubtful accounts..  } & 6,400\
\hline &\text {  Accounts receivable} & &6,400\
\hline
\end{array}$

Quizplus · Accepted Answer

When using the allowance method, the entry to write off an uncollectible account is to debit the Allowance for Doubtful Accounts and credit Accounts Receivable. This reflects the removal of the uncollectible amount from both the allowance and the receivables.

A Company Uses the Allowance Method of Accounting for Bad