The Lowery Co. uses the direct write-off method of accounting for uncollectible accounts receivable. Lowery has a customer whose accounts receivable balance has been determined to likely be uncollectible. The entry to write off this account would be which of the following? a. debit Allowance for Doubtful Accounts; credit Accounts Receivable b. debit Bad Debt Expense Doubtful Accounts c. debit Sales Returns and Allowance; credit Accounts Receivable d. debit Bad Debt Expense; credit Accounts Receivable

Question

Business

Morgan Mckenzie

9 July, 22:46

The Lowery Co. uses the direct write-off method of accounting for uncollectible accounts receivable. Lowery has a customer whose accounts receivable balance has been determined to likely be uncollectible. The entry to write off this account would be which of the following? a. debit Allowance for Doubtful Accounts; credit Accounts Receivable b. debit Bad Debt Expense Doubtful Accounts c. debit Sales Returns and Allowance; credit Accounts Receivable d. debit Bad Debt Expense; credit Accounts Receivable

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Ryann Glass · Answer 1

d. Debit Bad Debt Expense; Credit Accounts Receivable

Explanation:

This would be the entry needed to write-off this account. This is an example of the direct write-off method of accounting. This is a method that is employed to recognize bad debts expense that arises from credit sales. This method does not permit allowance account. Instead, an account receivable is written-off directly to expense after the account is determined uncollectible.