When the Allowance Method Is Used for Bad Debts, the Entry

question 30

Multiple Choice

When the allowance method is used for bad debts, the entry to write off an individual account known to be uncollectible involves a:

• A) debit to an expense account.
• B) credit to an expense account.
• C) credit to the Allowance account.
• D) debit to the Allowance account.

---

Definitions:

Manufacturing Overhead

All manufacturing costs other than direct materials and direct labor, including maintenance, utilities, and depreciation of production facilities.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including materials, labor, and overhead costs, but excluding indirect expenses such as distribution costs.

Balance Sheet

Balance Sheet is a financial statement that provides a snapshot of a company's financial condition at a specific time, detailing assets, liabilities, and shareholders' equity.

Spreadsheet

A digital tool that allows users to organize, analyze, and store data in rows and columns, often used for calculations and data analysis.