2. The following information is from the records of Armadillo Camera Shop: Accou

Question

2. The following information is from the records of Armadillo Camera Shop: Accounts receivable, December 31, 2017 Net credit sales for 2017 Accounts written off as uncollectible during 2017 Cash sales during 2017 $81,000 (debit) 162,000 17,000 45,000 The company uses the direct write- off method for bad debts. What is the amount of bad debts expense? A. $45,000 B. $17,000 O c. $81,000 D. $64,000 3. Under the direct write-off method, the entry to write off an un O A. a credit to the Allowance for Bad Debts B. a debit to Bad Debts Expense account a debit to the customer's Account Receivable No entry is made to write off uncollectible accounts. ° C. D.

Explanation / Answer

2. Option b is correct

$17,000

Explanation:

Under the direct write off method , a company record bad debt expense only when an account is determined to be uncollectible and is written off. So here this amount is $17,000.

3. Option b is correct:

Explanation:

Under direct write off method , following entry is passed to write off the uncollectible account:

So involved Debit to bad debt expense account

Bad debt expense $17,000 Account receivable $17,000

Related Questions

Navigate

• Browse (All)
• Browse 2
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.