Accounting · Receivables Management
Following a mid-year review of its aged receivables' listing, Pluto Co identified three irrecoverable debts totaling $630 which should be written off. One of the debts, for $150, was already included in the specific allowance for receivables. What accounting entries should Pluto Co make to write off these irrecoverable debts?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Debit Irrecoverable debts $630, Credit Trade receivables $480, Credit Allowance for receivables $150
- 2Debit Irrecoverable debts $480, Debit Allowance for receivables $150; Credit Trade receivables $630✓
- 3Debit Irrecoverable debts $630, Credit Trade receivables $630
- 4Debit Irrecoverable debts $480, Credit Trade receivables $480
Correct answer
Debit Irrecoverable debts $480, Debit Allowance for receivables $150; Credit Trade receivables $630
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