E6-6 - Solution: (a) The direct write-off method Debit Bad...

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Tech Savvy, a computer consulting firm, has decided to write off the $8,375 balance of an account owed by a customer. Illustrate the effects on the accounts and financial statements to record the write-off (a) assuming that the direct write-off method is used, and (b) assuming that the allowance method is used.
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Unformatted text preview: Solution: (a) The direct write-off method Debit Bad Debt Expense $8,375 Credit Accounts Receivable $8,375 (b) the allowance method Debit Reserve for Bad Debts (a contra asset account) Credit Accounts Receivable...
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This note was uploaded on 03/30/2011 for the course ACC 305 taught by Professor Allison during the Spring '11 term at Western Intl..

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