Accounts receivable Accounts receivable refers to the amounts to be received within a short period from customers upon the sale of goods and services on account. In other words, accounts receivable are amounts customers owe to the business. Accounts receivable is an asset of a business. Bad debt expense: Bad debt expense is an expense account. The amounts of loss incurred from extending credit to the customers are recorded as bad debt expense. In other words, the estimated uncollectible accounts receivable are known as bad debt expense. Direct write-off method: This method does not make allowance or estimation for uncollectible accounts, instead this method directly write-off the actual uncollectible accounts by debiting bad debt expense and by crediting accounts receivable. Under this method, accounts would be written off only when the receivables from a customer remain uncollectible. To journalize: The collection of $1,200 cash and write-off of Person M’s $4,000 uncollectible accounts, using direct write-off method.

Question

Want to see the full answer?

Answer 1

Question

Chapter 9, Problem 9.1APE

To determine

Accounts receivable

Accounts receivable refers to the amounts to be received within a short period from customers upon the sale of goods and services on account. In other words, accounts receivable are amounts customers owe to the business. Accounts receivable is an asset of a business.

Bad debt expense:

Bad debt expense is an expense account. The amounts of loss incurred from extending credit to the customers are recorded as bad debt expense. In other words, the estimated uncollectible accounts receivable are known as bad debt expense.

Direct write-off method:

This method does not make allowance or estimation for uncollectible accounts, instead this method directly write-off the actual uncollectible accounts by debiting bad debt expense and by crediting accounts receivable. Under this method, accounts would be written off only when the receivables from a customer remain uncollectible.

To journalize: The collection of $1,200 cash and write-off of Person M’s $4,000 uncollectible accounts, using direct write-off method.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Journalize the following transactions, using the direct write-off method of accounting for uncollectible receivables:Apr. 15. Received $800 from Jean Tooley and wrote off the remainder owed of $1,200 as uncollectible.Aug. 7. Reinstated the account of Jean Tooley and received $1,200 cash in full payment.

Journalize the following transactions, using the direct write-off method of accounting for uncollectible receivables:Oct. 2. Received $600 from Rachel Elpel and wrote off the remainder owed of $1,350 as uncollectible.Dec. 20. Reinstated the account of Rachel Elpel and received $1,350 cash in full payment.

Journalize the following transactions, using the direct write-off method of accounting for uncollectible receivables: Oct. 2: Received $1,140 from Elita Ramirez and wrote off the remainder owed of $2,570 as uncollectible. If an amount box does not reguire an entry, leave it blank. Oct. 2 Accounts Payable-Elita Ramirez lita Ramirez and received $2,570 cash in full payment. If an amount box does not require an entry, leave it blank. Accounts Receivable-Elita Ramirez Allowance for Doubtful Accounts Bad Debt Expense Cash