Under the Direct Write-Off Method, the Entry to Estimate the Bad-Debt

question 62

Multiple Choice

Under the direct write-off method, the entry to estimate the bad-debt expense includes a:

• A)debit to the customer's account receivable.
• B)credit to allowance for doubtful accounts.
• C)debit to bad-debt expense.
• D)No entry is made to estimate uncollectible accounts.

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Definitions:

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.