Question

Using the direct write off method, how do you journalize entry for uncollectable recievable_________

Answer 1

The direct write off method is used to record uncollectible receivables. The journal entry involves debiting Bad Debt Expense and crediting Accounts Receivable.

Step-by-step explanation:

The direct write off method is used to record uncollectible receivables in the financial statements. When using this method, the journal entry for uncollectable receivables would be as follows:

1. Debit Bad Debt Expense: This represents the estimated amount of receivables that will not be collected and is recorded as an expense on the income statement.
2. Credit Accounts Receivable: This reduces the accounts receivable balance on the balance sheet, as the amount is no longer expected to be collected.

For example, let's say a company determines that $1,000 of its receivables will not be collected. The journal entry would be:

• Debit Bad Debt Expense $1,000
• Credit Accounts Receivable $1,000