Question

Zino Company determines that a customer balance of $200,from Hollis Co. is uncollectible. Zino uses the allowance method to account for bad debts. The entry to write off the uncollectible balance will include a: debit to Allowance for Doubtful Accounts and a credit to Accounts Receivable. debit to Allowance for Doubtful Accounts and a credit to Bad Debts Expense. debit to Bad Debts Expense and a credit to Allowance for Doubtful Accounts. debit to Accounts Receivable and a credit to Allowance for Doubtful Accounts.

Answer 1

The correct answer is A

Step-by-step explanation:

The journal entry to be posted to write off the balance of uncollectible is as:

Allowance for Doubtful Accounts A/c..........................Dr $200

Accounts Receivable A/c.......................................Cr $200

As the allowance method is used so the accounts receivable account will be credited and the allowance for doubtful accounts is debited with the amount which is recovered that is $200.

Allowance method is generally refer to one of the ways for reporting the uncollectible or bad debt expense which results from a company selling the goods on credit.