When a firm decides that a particular customer account is uncollectible, it removes that account by debiting the _____ and crediting _____ This process is called writing off the account.
A)Accounts Receivable, Gross; Allowance for Uncollectibles
B)Accounts Receivable, Net; Allowance for Uncollectibles
C)Allowance for Uncollectibles; Accounts Receivable, Gross
D)Allowance for Uncollectibles; Accounts Receivable, Net
E)Bad Debt Expense; Accounts Receivable, Net

Question

Quizplus · Accepted Answer

When a firm decides that a particular customer account is uncollectible, it removes that account by debiting the Allowance for Uncollectibles and crediting the Accounts Receivable, Gross. This process is called writing off the account. The Allowance for Uncollectibles account is used to accumulate estimated uncollectible amounts, and it reduces the balance of the Accounts Receivable account to the Net realizable value. Therefore, Option C is the best choice as it accurately reflects the process.

When a Firm Decides That a Particular Customer Account Is