Entries to Write Off Accounts Receivable Quantum Solutions Company, a computer consulting firm, has decided to write off the $33,550 balance of an account owed by a customer, Alliance Inc. a. Journalize the entry to record the write-off, assuming that the direct write-off method is used.

Question

Zion Graham

Business

16 January, 00:52

Entries to Write Off Accounts Receivable Quantum Solutions Company, a computer consulting firm, has decided to write off the $33,550 balance of an account owed by a customer, Alliance Inc. a. Journalize the entry to record the write-off, assuming that the direct write-off method is used.

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Chance · Answer 1

Debit Bad debt expense $33,550

Credit Accounts receivable $33,550

(To Record writeoff of accounts receivable)

Explanation:

Direct writeoff means situation whereby the accounts receivable is written off directly to income statement instead of using the allowance account.

Since the direct writeoff method was used, we have to Debit the bad debt expense account and Credit accounts receivable. This entry would deplete the profit by $33,550 and reduce the balance in the accounts receivable.