Question

Miles uses the allowance method and wrote off the account of James. Miles then received $559 as partial payment on the account of James. The journal entry to record the initial write-off includes a (A) debit to Allowance for Doubtful Accounts (B) debit to Accounts Receivable—James(C) credit to Bad Debt Expense (D) credit to Cash

Answer 1

Answer:

(A) debit to Allowance for Doubtful Accounts

Explanation:

The write-off will decrease both, the allowance and the account receivable account. Thus, it will recognize no expense as this is the objective of the allowance method.

allowance for doubbtful accounts 559 debit

                    accounts receivable          559 credit