When $2,500 of accounts receivable are determined to be uncollectible,which of the following should the company record to write off the accounts using the allowance method?

Question

Quizplus · Accepted Answer

The allowance method involves estimating and setting aside a certain amount of money in the Allowance for Uncollectible Accounts account to cover potential bad debt losses. When an account is deemed uncollectible, the company would debit Allowance for Uncollectible Accounts to reduce the amount set aside and credit Accounts Receivable to reflect that the receivable is no longer expected to be collected. Therefore, the correct answer is D, a debit to Allowance for Uncollectible Accounts and a credit to Accounts Receivable.

When $2,500 of Accounts Receivable Are Determined to Be Uncollectible,which