To Write Off a Transaction That Was Charged a Sales

question 8

Multiple Choice

To write off a transaction that was charged a sales tax:

• A)use a journal entry to move the customer's balance (credit) to the Bad Debt Expense account (debit)
• B)use a journal entry to move the customer's balance (credit) to Allowance for Uncollectable Accounts (debit)
• C)use the Credit Memo window
• D)use the Receive Payments window (Discount Info button)

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Definitions:

Schedule A

An IRS form used for itemizing deductions such as medical and dental expenses, taxes paid, interest paid, gifts to charity, and casualty and theft losses.

Qualified Residence

A primary or secondary home that meets certain IRS criteria, allowing for potential mortgage interest deductions.

Deduction

An expense that can be subtracted from gross income to reduce the amount of income subject to income tax.

Taxpayer's Principal Residence

The primary dwelling a taxpayer lives in for a major portion of the year, which can qualify for certain tax benefits like the mortgage interest deduction.