The entry that includes a debit to Allowance for Doubtful Accounts and a credit to Accounts Receivable is a(n) ______.Multiple choice question.subsidiary entry to increase a customer's account for credit salesnet realizable entry to report the amount expected to be collectedadjusting entry to allow for estimated bad debtswrite-off of a specific customer's account
Question
The entry that includes a debit to Allowance for Doubtful Accounts and a credit to Accounts Receivable is a(n) ______.Multiple choice question.subsidiary entry to increase a customer's account for credit salesnet realizable entry to report the amount expected to be collectedadjusting entry to allow for estimated bad debtswrite-off of a specific customer's account
Solution
The entry that includes a debit to Allowance for Doubtful Accounts and a credit to Accounts Receivable is a(n) write-off of a specific customer's account.
Here's why:
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When a company realizes that it won't be able to collect payment from a specific customer, it needs to write off that customer's account.
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The Allowance for Doubtful Accounts is debited because this account is used to estimate the amount of receivables that the company expects it won't be able to collect. When a specific account is written off, the estimate is reduced.
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The Accounts Receivable is credited to decrease the amount of receivables that the company expects to collect. This is because the company has realized that it won't be able to collect the payment from the specific customer whose account is being written off.
So, the correct answer is "write-off of a specific customer's account".
Similar Questions
The adjusting entry to record the allowance for doubtful accounts includes a ______. (Check all that apply.)Multiple select question.credit to Accounts Receivabledebit to Sales Revenuedebit to Accounts Receivablecredit to Allowance for Doubtful Accountsdebit to Bad Debt Expensecredit to Sales Revenuedebit to Allowance for Doubtful Accountscredit to Bad Debt Expense
The Allowance for Doubtful Accounts T-account will have the ______ on the credit side.Multiple choice question.sales discounts and allowancessales on accountestimated bad debts from the adjusting entrywrite-offs of specific customers
9. An entry that results in a debit to an expense account and a credit to a related liability account is an example of which category of adjusting entries?
Assuming the allowance method, the entry to record the write-off of a specific, non-paying customer is recorded with a debit to ______.Multiple choice question.Allowance for Doubtful Accounts and credit to Accounts ReceivableAccounts Receivable and credit to Allowance for Doubtful Accounts.Bad Debts Expense and credit to Accounts ReceivableAccounts Receivable and credit to Bad Debts Expense
If the Allowance for Doubtful Accounts was debited, what account was credited?Multiple choice question.Accounts ReceivableBad Debt ExpenseSales Discounts and AllowancesAccounts PayableSales Revenue
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