What Is the Normal Journal Entry When Writing-Off an Account

question 51

Multiple Choice

What is the normal journal entry when writing-off an account as uncollectible under the allowance method?

• A) Debit Allowance for Doubtful Accounts, credit Accounts Receivable.
• B) Debit Allowance for Doubtful Accounts, credit Bad Debt Expense.
• C) Debit Bad Debt Expense, credit Allowance for Doubtful Accounts.
• D) Debit Accounts Receivable, credit Allowance for Doubtful Accounts.

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Definitions:

Journal Entries

Records of financial transactions in the accounts of a business, providing a chronological order of all debits and credits.

Liquidation

The process of winding up a company's financial affairs by selling its assets to pay off its debts, eventually leading to the dissolution of the company.

Liquidator's Receipts

The proceeds collected by a liquidator during the process of winding up a company, distributed to claimants and creditors according to statutory priorities.

Joint Arrangements

Agreements between two or more parties to undertake an economic activity that is subject to joint control.