Open Range Foods Writes Off a Bad Debt of $400

question 56

Multiple Choice

Open Range Foods writes off a bad debt of $400 on a specific customer account. The journal entry for this transaction under the allowance method would include:

• A) a debit to Bad Debts Expense.
• B) a credit to Bad Debts Expense.
• C) a credit to Allowance for Doubtful Accounts.
• D) a debit to Allowance for Doubtful Accounts.

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Definitions:

Bills

Documents that indicate the amount owed for goods or services provided, typically requiring payment within a specified timeframe.

Pay

The act of disbursing money in exchange for goods, services, or to fulfill any kinds of obligations.

1099 Forms

Tax forms used in the United States to report income from self-employment, interest, dividends, rents, and other sources of income.

SEC

The Securities and Exchange Commission, a U.S. government oversight agency responsible for regulating the securities markets and protecting investors.