Question

At the beginning of 2015, the balance in Jackson Enterprises' Allowance for Uncollectible Accounts was $31,800. During 2015, the company wrote off $38,000 of accounts receivable. Writing off the individual bad debts would include a:
a. Debit to Bad Debt Expense.
b. Credit to Accounts Receivable.
c. Credit to the Allowance for Uncollectible Accounts.
d. Debit to Bad Debt Expense; credit to the Allowance for Uncollectible Accounts.

Answer 1

Answer:

b. Credit to Accounts Receivable.

Explanation:

The journal entry is as follows

Allowance for doubtful accounts A/c Dr $38,000

       To Account receivable A/c $38,000

(Being the written-off amount is recorded)        

While recording this transaction, we debited the allowance for doubtful debts and credited the account receivable account so that the correct posting could be done