Miles Uses the Allowance Method and Wrote Off the Account

question 120

Multiple Choice

Miles uses the allowance method and wrote off the account of James. Miles then received $559 as partial payment on the account of James. The journal entry to record the initial write-off includes a

• A) debit to Allowance for Doubtful Accounts
• B) credit to Cash
• C) debit to Accounts Receivable-James
• D) credit to Bad Debt Expense

---

Definitions:

Payback Period

The duration needed to recoup the funds spent on an investment.

Initial Cost

The initial expenditure involved in starting a project, purchasing an asset, or initiating an investment.

Net Cash Inflows

The amount of cash that a company receives during a specific period, minus the amount of cash outflows.

Remodeling Expenses

Costs associated with making improvements or alterations to a building or structure to enhance its functionality or appearance.