When the allowance method is used, the allowance for doubtful accounts would decrease when a(n)
Specific account receivable is collected.
Account previously written off is collected.
Account previously written off becomes collectible.
Specific uncollectible account is written off. Correct
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This answer is correct. When the allowance method of recognizing bad debts is used, the entry to establish the allowance account is
Bad debts expense xx
Allowance for bad debts xx
The entry to write off a specific uncollectible account is
Allowance for bad debts xx
AR xx
Thus, the allowance is decreased when the account is written off.
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