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If Ohio Company received $2,250 as partial payment on the $5,500 account of Carson Mueller Company and wrote off the remaining balance as uncollectible, the only difference between recording the entry under the direct write-off method and the allowance method (assuming that an adequate allowance account had been set up) would be

Respuesta :

Answer:

Explanation:

Under the direct write-off method, the journal entry would be

Bad debt expense A/c Dr XXXX

       To Accounts receivable XXXX

(Being bad debt expense is recorded)

Under the allowance method, the journal entry would be

Bad debt expense A/c Dr $ XXXX

   To Allowance for Doubtful Accounts $ XXXX

(Being bad debt is recorded)

The debit to bad debt expense for $3,250 ($5,500 - $2,250) under the direct write-off method instead of the debit to the Allowance for Doubtful Accounts under the allowance method