Courtney Uses the Allowance Method of Accounting for Bad and Doubtful

question 37

Multiple Choice

Courtney uses the allowance method of accounting for bad and doubtful debts. When she received notice that a debtor, who owed her $5 000, was in liquidation she decided to write off the debt as bad. What is the general journal entry to record the write off?

• A) DR Bad debts expense $5 000; CR Allowance for doubtful debts $5 000
• B) DR Bad debts expense $5 000; CR Accounts receivable $5 000
• C) DR Allowance for doubtful debts $5 000; CR Bad debts expense $5 000
• D) DR Allowance for doubtful debts $5 000; CR Accounts receivable $5 000

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