Uptown, Inc $$\begin{array} { | c | r | r | } \hline \text { Bad Debts Expense } & 125 & \\\hline \text { Accounts Receivable } & & 125 \\\hline\end{array}$$

question 152

Multiple Choice

Uptown, Inc. has determined that an account receivable of $125 is uncollectible. The company uses the direct write-off method. Which of the following entries is required to record the write-off?

• A) \[\begin{array} { | c | r | r | }
• \hline \text { Bad Debts Expense } & 125 & \\
• \hline \text { Accounts Receivable } & & 125 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | c | r | r | }
• \hline \text { Cash } & 125 & \\
• \hline \text { Accounts Receivable } & & 125 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | c | r | r | }
• \hline \text { Allowance for Bad Debts } & 125 & \\
• \hline \text { Accounts Receivable } & & 125 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | c | r | r | }
• \hline \text { Accounts Receivable } & 125 & \\
• \hline \text { Bad Debts Expense } & & 125 \\
• \hline
• \end{array}\]

---

Definitions:

Liability

The state of being legally responsible for something, particularly for debts or legal obligations.

Act of God

Natural events outside of human control, such as hurricanes, earthquakes, or floods, which are not caused by and cannot be prevented by humans.

Garage

A building or secured area designed for the storage and maintenance of vehicles.

Shed

A small building, typically made of wood or metal, used for storage or as a workshop, commonly found in gardens or backyards.