A Company Uses the Direct Write-Off Method

question 176

Multiple Choice

A company uses the direct write-off method.The company writes off a $3,000 customer account balance when it becomes clear that the particular customer will never pay.What is the journal entry that would be prepared to record this write-off?

• A)Debit Bad Debt Expense and credit Accounts Receivable for $3,000.
• B)Debit Allowance for Doubtful Accounts and credit Bad Debt Expense for $3,000.
• C)Debit Bad Debt Expense and credit Allowance for Doubtful Accounts for $3,000.
• D)Debit Accounts Receivable and credit Bad Debt Expense for $3,000.