Alberta's Appliances is a wholesaler that sells to retail stores on credit.To provide for possible bad debts,Alberta established a $32,000 allowance for uncollectible accounts.One of its customers goes bankrupt and Alberta decided to write off the account as uncollectible.What journal entry should Alberta make to record the bankruptcy?

Question

Quizplus · Accepted Answer

When a specific account is deemed uncollectible, the correct action is to remove the amount from accounts receivable and reduce the allowance for uncollectible accounts. This is done by debiting the allowance for uncollectible accounts and crediting accounts receivable, reflecting the write-off without impacting the current period's income statement.

Alberta's Appliances Is a Wholesaler That Sells to Retail Stores