14. Wizard Incorporated follows the allowance method for estimating bad debt. As

Question

14. Wizard Incorporated follows the allowance method for estimating bad debt. As of June 30, 2013 the company's accounting records reflect outstanding accounts receivable of $15,000 with an allowance for doubtful accounts of $5,000. The controller has been authorized to formally write off an account balance of $1,000 that was previous included in the $5,000 balance of the allowance for doubtful accounts. The correct journal entry to record this write off is: A) Bad Debts Expenses $1,000 Accounts Receivable $1,000 Bad Debts Expenses $1,000 Allowance for Doubtful Accounts Accounts Receivable $1,000 Allowance for Doubtful Accounts $1,000 Allowances for Doubtful Accounts $1,000 B) C) D) $1,000 Accounts Receivable $1,000

Explanation / Answer

Dear correct entry is D

As Allowance account have already maintained by company and write off of debt should be adjusted against this accoit first..

So correct entry is D

Allowance debit 1000

To AR. 1000

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