When a Company Is Using the Direct Write-Off Method and an Account

question 64

Multiple Choice

When a company is using the direct write-off method and an account is written off,the journal entry consists of a:

• A)credit to Accounts receivable and a debit to Interest expense.
• B)debit to Accounts receivable and a credit to Cash.
• C)credit to Accounts receivable and a debit to Bad debts expense.
• D)debit to the Allowance for doubtful debts and a credit to Accounts receivable.

---

Definitions:

Public Company Accounting Oversight Board

A nonprofit corporation established by Congress to oversee the audits of public companies in order to protect the interests of investors and further the public interest in the preparation of informative, accurate, and independent audit reports.

Auditing Standards Board

The body responsible for issuing auditing, attestation, and quality control standards for audits of non-public entities in the United States.

Federal Agency

A unit of the federal government in the United States established by Congress to enforce laws and regulations in a specific area.