Under the Direct Write-Off Method,the Entry to Write Off an Uncollectible

question 143

Multiple Choice

Under the direct write-off method,the entry to write off an uncollectible account will include ________.

• A) a debit to Bad Debts Expense account
• B) a debit to the customer's Account Receivable
• C) a credit to the Allowance for Bad Debts
• D) No entry is made to write off uncollectible accounts.

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Definitions:

Equity

The value of an owner's interest in a property or a company, after all debts and other obligations have been accounted for.

Accounting

The systematic process of recording, reporting, and analyzing financial transactions of a business.

Information Age

A period in human history characterized by the shift from traditional industry to an economy based on information technology.

Separate Legal Entity

A status that allows a company to operate as its own legal entity, distinct from its shareholders, with rights to sue, be sued, own assets, and incur liabilities.