If the Direct Write-Off Method of Accounting for Uncollectible Receivables

question 90

Multiple Choice

If the direct write-off method of accounting for uncollectible receivables is used, what general ledger account is debited to write off a customer's account as uncollectible?

• A) Uncollectible Accounts Receivable
• B) Accounts Receivable
• C) Allowance for Doubtful Accounts
• D) Bad Debt Expense

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Definitions:

Market Rate

The market rate, often referred to as the going rate, is the standard or average interest rate, wage, or price charged or paid for a specific good, service, or asset in a specific market.

Equity Securities

Financial instruments that represent ownership interest in a company or corporation, such as common stock.

Cumulative Voting

Cumulative voting is a voting system that allows shareholders to allocate their votes to one or several candidates in a way that can increase minority shareholder representation on the board of directors.

Shareholder

An individual or organization that owns shares in a corporation, thus holding a portion of the company's stock.