On January 1,Davidson Services has the following balances: Davidson has the following transactions during January: Credit sales of $100,000,collections of credit sales of $85,000,and write-offs of $15,000.Davidson uses the direct write-off method.
-At the end of January,the balance in Bad Debts Expense is ________.

Question

On January 1,Davidson Services has the following balances:  Davidson has the following transactions during January: Credit sales of $100,000,collections of credit sales of $85,000,and write-offs of $15,000.Davidson uses the direct write-off method.
-At the end of January,the balance in Bad Debts Expense is ________.

Quizplus · Accepted Answer

Using the direct write-off method, Bad Debts Expense is recognized at the time a receivable is deemed uncollectible and written off. Based on the given transactions, the write-offs were $15,000, indicating that Bad Debts Expense should also be $15,000. Therefore, the correct answer is D) $15,000.

On January 1,Davidson Services Has the Following Balances: Davidson