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

question 158

Multiple Choice

Charms,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) \[\begin{array} { | c | r | r | }
• \hline \text { Accounts Receivable } & 125 & \\
• \hline \text { Bad Debts Expense } & & 125 \\
• \hline
• \end{array}\]

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Definitions:

Equal Bargaining Positions

A situation where negotiating parties possess similar power and leverage, promoting fairness in the negotiation outcome.

Certain Types Of Breaches

Specific instances or categories of violations of contractual agreements or legal obligations.

Quasi Contract

A legal principle that allows a court to award compensation for goods or services rendered where there was no actual contract, based on the concept that it would be unjust to allow one party to benefit at the other's expense without payment.

Legal Obligation

A duty enforced by law that requires a person or entity to act or refrain from acting in a certain way.