A company who uses the allowance method, writes-off a receivable of $2,000. Prior to the journal entry, the balance in the Allowance for Uncollectible Accounts was $18,432. After the entry to write-off the receivable is made, the balance in the Allowance for Uncollectible Accounts will be:

Question

Quizplus · Accepted Answer

When a receivable is written off, it is subtracted from the balance in the Allowance for Uncollectible Accounts. Therefore, the new balance in the Allowance for Uncollectible Accounts after the write-off will be the old balance minus the amount of the write-off.

$18,432 (old balance) - $2,000 (write-off) = $16,432 (new balance)

So the correct answer is C: $16,432.

A Company Who Uses the Allowance Method, Writes-Off a Receivable