Question

If the direct write-off method of accounting for uncollectible receivables is used, what general ledger account is credited when a customer's account is written off as uncollectible? a.Uncollectible Accounts Payable. b.Bad Debt Expense. c.Accounts Receivable. d.Allowance for Doubtful Accounts.

Answer 1

Answer:

c. Accounts Receivable

Explanation:

Under the direct method, the journal entry for uncollectible amount is shown below:

Bad debt expense A/c Dr

     To Accounts receivable A/c

(Being the uncollectible amount is recorded as a bad debt expense)

In this method, there is a surety that the particular amount would not be paid. So we debited the bad debt expense account and credited the account receivable account