Question: Thomas Co . sold $ 1 , 0 0 0 worth of merchandise on a bank credit card with a 3 % fee. The entry

Thomas Co

.

sold $

1, 000

worth of merchandise on a bank credit card with a

3 %

fee. The entry to record the sales transaction would include a debit to Cash in the amount of $

The direct write

-

off method records bad debts expense only when an account becomes uncollectible, which is not always in the same period as the sale. For this reason, the direct write

-

off method violates the principle.

Thomas Co . sold $ 1 , 0 0 0 worth of merchandise

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