Searcy has accounts receivable of $700,000 and an allowance for doubtful accounts of $54,000. On January 24, 2020, it is learned that the company’s receivable from Hutley Inc. is not collectible and therefore management authorized a write-off of $8,000. The journal entry to record the write-off will include a Select one: a. Debit to Bad Debts Expense. b. Debit to Sales. c. None of the above d. Credit to Accounts Receivable. e. Credit to the Allowance for Doubtful Accounts.

d. Credit to Accounts Receivable.

Explanation:

Hutley Inc. is not going to pay the $8,000 to Searcy, therefore Searcy will make the following entry to write off the balance from Account Receivables.

Debit: Allowance for Doubtful Accounts $8,000

Credit: Accounts Receivables $8,000

To write-off Hutley Inc. receivables.

the definition of a small business is an independently owned and operated company that is limited in size and in revenue depending on the industry. a local bakery that employs 10 people is an example of a small business. a manufacturing facility that employees less than 500 people is an example of a small business.