Question

Bellows Company uses the allowance method to account for uncollectible accounts. After making a concerted effort, Bellows’ management determined that it will not be able to collect the $1,200 owed to it by its customer Acme Inc. Prepare the appropriate journal entry to record the receivable write-off.

Answer 1

Answer:

Db Allowance for Doubtful Accounts_1200

Cr to Accounts Receivable_____________1200

Explanation:

When a specific customer's account is identified as uncollectible, the journal entry to write off the account is:

A debit to Allowance for Doubtful Accounts (to reduce the Allowance balance that was previously established)

A credit to Accounts Receivable (to remove the amount that will not be collected)