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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Definitions:

Balance

The state of having equal or appropriate proportions, often used in the context of work-life balance or balancing competing interests.

Occipital

Pertaining to the occipital lobe at the back of the brain, associated with visual processing.

Parietal Bones

The parietal bones are a pair of bones located on either side of the skull, forming the roof and sides of the cranium.

Frontal

Pertaining to the forehead or the frontal bone of the skull, often used in reference to the lobe of the brain located behind the forehead.