Gideon Company Uses the Direct Write-Off Method of Accounting for Uncollectible

question 64

Short Answer

Gideon Company uses the direct write-off method of accounting for uncollectible accounts. On May 3, the Gideon Company wrote off the $2,000 uncollectible account of its customer, A. Hopkins. The entry or entries Gideon makes to record the write off of the account on May 3 is:
A)
$\begin{array}{|l|r|r|}\hline \text { Allowance for Doubtful Accounts } & 2,000 & \\\hline \text { Accounts Receivable-A. Hopkins } & & 2,000 \\\hline\end{array}$
B)
$\begin{array}{|l|r|r|}\hline \text { Accounts Receivable-A. Hopkins } & 2,000 & \\\hline \text { Bad Debts Expense } & & 2,000 \\\hline\end{array}$
C)
$\begin{array}{|l|r|r|}\hline \text { Cash } & 2,000 & \\\hline \text { Accounts Receivable-A. Hopkins } & & 2,000 \\\hline\end{array}$
D)
$\begin{array}{|l|r|r|}\hline \text { Accounts Receivable-A. Hopkins } & 2,000 & \\\hline \text { Cash } & & 2,000 \\\hline\end{array}$
E)
$\begin{array}{|l|r|r|}\hline \text { Bad Debts Expense } & 2,000 & \\\hline \text { Accounts Receivable-A. Hopkins } & & 2,000 \\\hline\end{array}$

• A)
• \(\begin{array}{|l|r|r|}
• \hline \text { Allowance for Doubtful Accounts } & 2,000 & \\
• \hline \text { Accounts Receivable-A. Hopkins } & & 2,000 \\
• \hline
• \end{array}\)
• B)
• \(\begin{array}{|l|r|r|}
• \hline \text { Accounts Receivable-A. Hopkins } & 2,000 & \\
• \hline \text { Bad Debts Expense } & & 2,000 \\
• \hline
• \end{array}\)
• C)
• \(\begin{array}{|l|r|r|}
• \hline \text { Cash } & 2,000 & \\
• \hline \text { Accounts Receivable-A. Hopkins } & & 2,000 \\
• \hline
• \end{array}\)
• D)
• \(\begin{array}{|l|r|r|}
• \hline \text { Accounts Receivable-A. Hopkins } & 2,000 & \\
• \hline \text { Cash } & & 2,000 \\
• \hline
• \end{array}\)
• E)
• \(\begin{array}{|l|r|r|}
• \hline \text { Bad Debts Expense } & 2,000 & \\
• \hline \text { Accounts Receivable-A. Hopkins } & & 2,000 \\
• \hline
• \end{array}\)

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Definitions:

Return

The profit or loss derived from an investment over a particular period, expressed either in percentage or absolute terms.

Tradeoff

A decision situation that involves diminishing or losing one quality, quantity, or property of a set or design in return for gains in other aspects.

Standard Deviation

A measure of the dispersion or variability in a set of data points, indicating how much the observations differ from the mean of the data set.

Real Estate Project

A development undertaking in the real estate sector, which may involve construction, renovation, or improvement of properties.