Gideon Company Uses the Direct Write-Off Method of Accounting for Uncollectible

question 72

Multiple Choice

Gideon Company uses the direct write-off method of accounting for uncollectible accounts.On May 3,the Gideon Company wrote off the $2,000 uncollectible account of its customer,A.Hopkins.The entry or entries Gideon makes to record the write off of the account on May 3 is:

• A) \[\begin{array} { | l | r | r | }
• \hline \text { Accounts Receivable-A Hopkins } & 2,000 & \\
• \hline \text { Bad Debts Expense } & & 2,000 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | l | r | r | }
• \hline \text { Allowance for Doubtful Accounts } & 2,000 & \\
• \hline \text { Accounts Receivable-A Hopkins } & & 2,000 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | l | r | r | }
• \hline \text { Accounts Receivable-A Hopkins } & 2,000 & \\
• \hline \text { Cash } & & 2,000 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | l | r | r | }
• \hline \text { Bad Debts Expense } & 2,000 & \\
• \hline \text { Accourts Receivable-A Hopkins } & & 2,000 \\
• \hline
• \end{array}\]
• E) \[\begin{array} { | l | r | r | }
• \hline \text { Cash } & 2,000 & \\
• \hline \text { Accounts Receivable-A Hopkins } & & 2,000 \\
• \hline
• \end{array}\]

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Definitions:

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