A Company Using the Allowance Method of Accounting for Bad

question 25

Multiple Choice

A company using the allowance method of accounting for bad debts has already set up an allowance for doubtful accounts. It now decides that one particular balance, for customer X, of $300, is uncollectible. The appropriate way to "write off" this item is:

• A) Record bad debt of expense $300, and reduce accounts receivable by $300
• B) Reduce sales by $300 and reduce accounts receivable by $300
• C) Reduce the allowance for doubtful accounts by $300 and increase bad debt expense by $300
• D) Reduce the allowance for doubtful accounts by $300 and decrease accounts receivable by $300

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