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Accounting Corp began operations on January 1, 2016. At the end of 2016, the company recorded bad...

Question:

Accounting Corp began operations on January 1, 2016. At the end of 2016, the company recorded bad debt expense of $1,500. On July 1, 2017, Accounting Corp wrote off as uncollectible $800 of accounts receivable. On August 31, 2017, the company reversed $200 of the write-offs made on July 1st. On December 31, 2017, the company estimated that 3% of its total accounts receivable would be uncollectible. Accounts receivable were $150,000 on December 31, 2017. The journal entry on July 1, 2017 includes a debit to __________ for __________ and a credit to __________ for __________.

Allowance for Doubtful Accounts:

The allowance for doubtful accounts represents the total amount of accounts receivable that the entity expects to be uncollectible in a reporting period and it is the contra asset account of the accounts receivable.

Answer and Explanation:

On July 1, 2017, Accounting Corp wrote off as uncollectible $800 of accounts receivable.

Account Debit Credit
Allowance for Doubtful Accounts $800
Accounts Receivable $800

The account Allowance for doubtful accounts is debited when there are write-offs.


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Accounts Receivable Journal Entries

from Financial Accounting: Homework Help Resource

Chapter 3 / Lesson 20
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