Question

If the direct write-off method of accounting for uncollectible receivables is used, what general ledger account is credited to write off a customer’s account as uncollectible? A. Uncollectible Accounts ExpenseB. Accounts ReceivableC. Allowance for Doubtful AccountsD. Interest Expense

Answer 1

Answer:

Option B) Accounts Receivable

Explanation:

In the Direct write-off method the company registered an entry that debit  Bad Debts Expense and an credit entry in the Accounts Receivable.

In this method doesn't exist a contra asset account such as  Allowance for Doubtful Accounts, the Bad Debt Expenses are reported on the Income Statement one year later of the sale.