Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 22 - No. 42)
If a company sells a product on credit, and the customer doesn't pay, which accounts will be affected after writing off the debt?
Cash and Accounts Receivable.
Bad Debt Expense and Accounts Receivable.
Allowance for Doubtful Accounts and Bad Debt Expense.
Allowance for Doubtful Accounts and Accounts Receivable.
Explanation
Writing off an irrecoverable debt decreases both Accounts Receivable and the Allowance for Doubtful Accounts.
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