During the year,a company concludes that $6,844 of specific customer accounts will not be collected.These are written off by:
A)debiting Accounts Receivable and crediting Allowance for Doubtful Accounts for $6,844.
B)debiting Accounts Receivable and crediting Bad Debt Expense for $6,844.
C)debiting Bad Debt Expense and crediting Accounts Receivable for $6,844.
D)debiting Allowance for Doubtful Accounts and crediting Accounts Receivable for $6,844.

Question

Quizplus · Accepted Answer

Writing off specific customer accounts involves reducing the Accounts Receivable balance and the Allowance for Doubtful Accounts balance by the same amount. The Allowance for Doubtful Accounts account serves as a contra-asset account to reduce the balance of Accounts Receivable to its expected net realizable value. Therefore, the correct entry is to debit Allowance for Doubtful Accounts and credit Accounts Receivable for the amount of $6,844.

During the Year,a Company Concludes That $6,844 of Specific Customer