On January 1,All City Services has the following balances: Accounts Receivable $22,000
Bad Debts Expense $0
All City has the following transactions during January: Credit sales of $120,000,collections of credit sales of $84,000,and write-offs of $18,000.All City uses the direct write-off method.The amount of Bad Debts Expense for January is ________.
A) $22,000
B) $25,714
C) $12,600
D) $18,000

Question

Quizplus · Accepted Answer

Under the direct write-off method, Bad Debts Expense is recognized when debts are deemed uncollectible and written off. In January, All City wrote off $18,000, so the Bad Debts Expense for January is $18,000.

On January 1,All City Services Has the Following Balances: Accounts