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

question 149

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) debit to Accounts receivable and a credit to Cash.
• B) credit to Accounts receivable and a debit to Uncollectible accounts expense.
• C) debit to the Allowance for uncollectible accounts and a credit to Accounts receivable.
• D) credit Accounts receivable and a debit to Interest expense.

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Definitions:

Conforming Goods

Goods that meet the specifications and terms as stated in a contract of sale.

Substantial Performance

A legal concept where a party has completed a majority of their obligations under a contract, warranting payment with possible deductions for uncompleted work.

Contract

A legally binding agreement between two or more parties that is enforceable by law.

Defective

Referring to a product or item that is flawed, damaged, or fails to meet quality standards.