Cash Basis_Accrual Basis- Journal Entries

Question 1

Direct Write-Off Method:

Journal Entry when an “account is deemed uncollectible”

Answer 1

Debit - Bad Debt Expense

Credit- Accounts Receivable

Question 2

Direct Write-Off Method:

Journal Entry when an “account previously written off is collected”

Answer 2

Debit - Cash

Credit- Bad Debt Recovered

Question 3

Allowance Method:

“End-of-period adjusting entry” for unknown accounts that are uncollectible and written off in a later period

Answer 3

Debit - Bad Debt Expense

Credit- Allowance of Doubtful Accounts

Question 4

Allowance Method:

Write-off of uncollectible accounts

Answer 4

Debit - Allowance of Doubtful Accounts

Credit- Accounts Receivable

Question 5

Allowance Method:

Recovery of accounts previously written-off

Answer 5

Debit - Accounts Receivable
Credit- Allowance of Doubtful Accounts

Debit - Cash
Credit- Accounts Receivable