Town and Country Saddle learns the account receivable for a customer is uncollectible.The journal entry under the allowance method to write-off an account is to:

Question

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Under the allowance method of accounting for uncollectible accounts, a company estimates the amount of accounts receivable that will not be collected and records this amount as a credit to the Allowance for Doubtful Accounts. When an account is determined to be uncollectible, the company writes it off by debiting the Allowance for Doubtful Accounts and crediting Accounts Receivable. This reduces both the accounts receivable balance and the allowance balance, reflecting the fact that the company no longer expects to receive payment for that particular account. Therefore, the correct journal entry to write-off an uncollectible account under the allowance method is to debit Allowance for Doubtful Accounts and credit Accounts Receivable.

Town and Country Saddle Learns the Account Receivable for a Customer