Question

Click to watch the Tell Me More Learning Objective 3 video and then answer the questions below. 1. On April 4, a $2,000 account receivable from J. P. Moore has been determined to be uncollectible. Using the direct write-off method, the entry to write off the account would include a __________ to __________..

Answer 1

The correct answer is debit to Bad Debt Expense.

Step-by-step explanation:

Taking into account the nature of both accounts, the registration of an account receivable is considered an asset taking into account that it is a callable value for the sale of products or services on credit, for which reason it is recorded in the debit to increase the company rights. In the exposed case, where the debt is considered uncollectible after exhausting many resources, the record is to recognize an expense (debit nature), against a credit to the account receivable with the objective of recognizing in the accounting the loss in the expense and the cancellation of the right in the asset.