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On January 31, 2020 PT
On January 31, 2020 PT. Dryer decided to write off the receivables belonging to PT. Brush worth $ 1,100, because PT. Brush failed to pay his debt. If PT. Dryer uses the allowance method, so how the journal made by PT. Dryer to write off PT. Brush on January 31, 2020? Select one:
a. (Dr) Allowance for Doubtful Accounts $ 1,100, (Cr) Accounts Receivable $ 1,100
b. (Dr) Accounts Receivable $ 1,100, (Cr) Bad Debt Expense $ 1,100
c. (Dr) Bad Debt Expense $ 1,100, (Cr) Allowance for Doubtful Accounts $ 1,100
d. (Dr) Bad Debt Expense $ 1,100, (Cr) Accounts Receivable $ 1,100
Expert Solution
Here answer is option: (A)
Explaintaion is as follows
1)When to record estimate of uncollectables entry would as follows
Baddebt expense A/c Dr
Allowance for doubtful expense A/c
2)When to write of CFI account entry as follows
Allowance for doubtful expense A/c Dr
Accounts receivable A/c
So as per allowance method option A is correct
Here is your answer
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