Explanation 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. Write-off: Write-off refers to deduction of a certain amount from accounts receivable, when it becomes uncollectible. Prepare the journal entry for March 31. Transaction Account Title and Explanation Debit Credit March 31 Bad debt expense $45,000 Account receivable $45,000 (To record the write-off of uncollectible account receivable ) Table (1) Description: To record this write-off of uncollectible receivables under direct write-off method, bad debt expense must be increased and accounts receivable must be decreased by $45,000. Hence, an increase in bad debt expense (increases the stockholders’ equity accounts) is debited with $45,000, and a decrease in accounts receivable (asset account) is credited with $45,000...

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Chapter 7, Problem 3E

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Ch. 7 - Prob. 1MCQ Ch. 7 - Prob. 2MCQ Ch. 7 - Prob. 3MCQ Ch. 7 - Prob. 4MCQ Ch. 7 - Prob. 5MCQ Ch. 7 - Prob. 1DQ Ch. 7 - Prob. 2DQ Ch. 7 - Prob. 3DQ Ch. 7 - 4. Why might a business prefer a note receivable...Ch. 7 - Prob. 5DQ

Ch. 7 - Prob. 6DQ Ch. 7 - Prob. 7DQ Ch. 7 - Prob. 8DQ Ch. 7 - Prob. 9DQ Ch. 7 - Prob. 10DQ Ch. 7 - Prob. 1QS Ch. 7 - Prob. 2QS Ch. 7 - Prob. 3QS Ch. 7 - Prob. 4QS Ch. 7 - Prob. 5QS Ch. 7 - Prob. 6QS Ch. 7 - Prob. 7QS Ch. 7 - Prob. 8QS Ch. 7 - Prob. 9QS Ch. 7 - Prob. 10QS Ch. 7 - Prob. 11QS Ch. 7 - Prob. 12QS Ch. 7 - Prob. 13QS Ch. 7 - Prob. 1E Ch. 7 - Prob. 2E Ch. 7 - Prob. 3E Ch. 7 - Prob. 4E Ch. 7 - Prob. 5E Ch. 7 - Prob. 6E Ch. 7 - Prob. 7E Ch. 7 - Prob. 8E Ch. 7 - Prob. 9E Ch. 7 - Prob. 10E Ch. 7 - Prob. 11E Ch. 7 - Prob. 12E Ch. 7 - Prob. 13E Ch. 7 - Prob. 14E Ch. 7 - Prob. 15E Ch. 7 - Prob. 16E Ch. 7 - Prob. 1AP Ch. 7 - Prob. 2AP Ch. 7 - Problem 7-3A Aging accounts receivable and...Ch. 7 - Prob. 4AP Ch. 7 - Prob. 5AP Ch. 7 - Prob. 1BP Ch. 7 - Prob. 2BP Ch. 7 - Prob. 3BP Ch. 7 - Prob. 4BP Ch. 7 - Prob. 5BP Ch. 7 - Prob. 7SP Ch. 7 - Prob. 1BTN Ch. 7 - Prob. 2BTN Ch. 7 - Prob. 3BTN Ch. 7 - COMMUNICATING IN PRACTICE BTN 7-4 As the...Ch. 7 - Prob. 5BTN Ch. 7 - Prob. 7BTN Ch. 7 - Prob. 9BTN

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