The Journal Entry to Write Off a Customer's Account Under

question 69

Multiple Choice

The journal entry to write off a customer's account under the direct write-off method is:

• A) debit Bad Debts Expense; credit Allowance for Doubtful Accounts.
• B) not required.
• C) debit Cash; credit Accounts Receivable/customer name.
• D) debit Bad Debts Expense; credit Accounts Receivable/customer name.
• E) debit Sales Revenue; credit Accounts Receivable/customer name.

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Definitions:

Discounters

Retailers or sellers that offer goods and services at lower prices by reducing overhead costs and margins, often leading to high volume sales.

Misery Index

An economic indicator calculated by adding the unemployment rate to the inflation rate, aiming to measure the health of an economy.

Unemployment Rate

This measures the percentage of the labor force that is jobless and actively seeking employment.

Inflation

The velocity at which prices for various goods and services climb, which in turn diminishes the purchasing power.