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General Accounting Discussions: when 2500 of the accounts recievable is determined to be uncollectible and written off, which of the

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    can someone tell me?
    when 2500 of the accounts recievable is determined to be uncollectible and written off, which of the following should the company record?

    1. a debit to bad expense and a credit to allowance for doubtful accounts.

    2. a debit to allowance for doubtful accounts and a credit to bad debt expense

    3. a debit to bad debt expense and a credit to accounts receivable

    4. Adebit to allowance for doubtful accounts and a credit to accounts receivable
    • CommentAuthorcoorg
    • CommentTimeNov 12th 2009
     
    I guess the 1st one is right.


    Dr ...Bad/doubtfull debt (P/L )
    Cr ...Provision/Allowance for Bad & Doubtfull debt (Other Liability)
    Thankful People: bigdoo
    • CommentAuthorlball1
    • CommentTimeNov 15th 2009
     
    If it is certain that it will never be collected and you are writing it off, you need to get it out of accounts receivable. I would say it would be a debit to bad debt expense and a credit to accounts receivable.
    Thankful People: bigdoo

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