What Is the Normal Journal Entry for Recording Bad Debt

question 22

Multiple Choice

What is the normal journal entry for recording bad debt expense under the allowance method?

• A) debit Allowance for Doubtful Accounts, credit Accounts Receivable
• B) debit Allowance for Doubtful Accounts, credit Bad Debt Expense
• C) debit Bad Debt Expense, credit Allowance for Doubtful Accounts
• D) debit Accounts Receivable, credit Allowance for Doubtful Accounts

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Definitions:

Ratio

A mathematical relationship between two numbers indicating how many times the first number contains the second.

Interval

A range of values between two points, often used in reference to scales in measurements.

True Zero Point

In measurement scales, a true zero point indicates the absence of the quantity being measured, allowing for ratios to be meaningfully calculated.

Interval Level Variables

Interval level variables are a type of quantitative data where the intervals between values are meaningful, but the data lack a true zero point, allowing for the measurement of difference but not ratio.