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

question 135

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 Bad Debts Expense.
• C)debit to the Allowance for Bad Debts and a credit to Accounts Receivable.
• D)credit Accounts Receivable and a debit to Interest Expense.

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Definitions:

Quantity Of Performance

A measure of the amount of work completed within a given time frame, often used to gauge productivity.

Quality Of Performance

The degree to which a task is completed with accuracy, efficiency, and adherence to standards.

Extrinsic Rewards

Rewards from an external source, often used as motivation, such as money, grades, or praise.

Intrinsic Motivation

The driving force behind actions that are carried out for their own sake and for the internal fulfillment they provide.