{"id":3547,"date":"2020-10-20T21:57:50","date_gmt":"2020-10-20T21:57:50","guid":{"rendered":"https:\/\/courses.lumenlearning.com\/wm-financialaccounting\/?post_type=chapter&#038;p=3547"},"modified":"2020-11-12T18:50:05","modified_gmt":"2020-11-12T18:50:05","slug":"direct-write-off-of-bad-accounts","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/chapter\/direct-write-off-of-bad-accounts\/","title":{"raw":"Direct Write-Off of Bad Accounts","rendered":"Direct Write-Off of Bad Accounts"},"content":{"raw":"<div class=\"textbox learning-objectives\">\r\n<h3>Learning Outcomes<\/h3>\r\n<ul>\r\n \t<li style=\"font-weight: 400;\">Apply the direct write-off method of accounting for bad debts<\/li>\r\n<\/ul>\r\n<\/div>\r\nAt the end of October, NeatNiks\u2019s accounts receivable ledger page looked like this:\r\n<table class=\"fin-table gridded\">\r\n  <caption class=\"u-clearfix\">\r\n    <div style=\"text-transform:uppercase;\">General Ledger<\/div>\r\n    <div><span style=\"float: left;\">Account: Accounts Receivable<\/span><span style=\"float: right;\">Account No. 120<\/span><\/div>\r\n  <\/caption>\r\n  <thead>\r\n    <tr aria-hidden=\"true\">\r\n      <td colspan=\"8\">&nbsp;<\/td>\r\n    <\/tr>\r\n    <tr style=\"text-transform:uppercase;\">\r\n      <th class=\"c\" colspan=\"2\" rowspan=\"2\" scope=\"col\">Date<\/th>\r\n      <th class=\"c\" rowspan=\"2\" scope=\"col\">Item<\/th>\r\n      <th class=\"c\" rowspan=\"2\" scope=\"col\">Post. Ref.<\/th>\r\n      <th class=\"c\" rowspan=\"2\" scope=\"col\">Debit<\/th>\r\n      <th class=\"c\" rowspan=\"2\" scope=\"col\">Credit<\/th>\r\n      <th class=\"c\" colspan=\"2\" scope=\"col\">Balance<\/th>\r\n    <\/tr>\r\n    <tr style=\"text-transform:uppercase;\">\r\n      <th class=\"c\" scope=\"col\">Debit<\/th>\r\n      <th class=\"c\" scope=\"col\">Credit<\/th>\r\n    <\/tr>\r\n  <\/thead>\r\n  <tbody>\r\n\r\n<tr>\r\n<td>20--<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n      <th scope=\"row\">Oct<\/th>\r\n      <th class=\"l\" scope=\"row\">1<\/th>\r\n      <th scope=\"row\"><em>Balance<\/em><\/th>\r\n<td>a<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td>0.00<\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n      <th><span class=\"u-sr-only\">Oct<\/span><\/th>\r\n<td class=\"l\">20<\/td>\r\n<td><\/td>\r\n<td>GJ1<\/td>\r\n<td class=\"r\">7,250.00<\/td>\r\n<td><\/td>\r\n<td class=\"r\">7,250.00<\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n      <th><span class=\"u-sr-only\">Oct<\/span><\/th>\r\n<td class=\"l\">30<\/td>\r\n<td><\/td>\r\n<td>GJ2<\/td>\r\n<td><\/td>\r\n<td class=\"r\">1,600.00<\/td>\r\n<td class=\"r\">5,650.00<\/td>\r\n<td><\/td>\r\n<\/tr>\r\n  <\/tbody>\r\n  <tbody>\r\n    <tr aria-hidden=\"true\">\r\n      <td colspan=\"8\">&nbsp;<\/td>\r\n    <\/tr>\r\n  <\/tbody>\r\n<\/table>\r\n\r\nAnd the subsidiary ledger total matched the control account:\r\n<table class=\"fin-table gridded\"><caption class=\"u-clearfix\">\r\n<div style=\"text-transform: uppercase;\">Subsidiary Ledger<\/div>\r\n<div><span style=\"float: left;\">Account: Accounts Receivable<\/span><span style=\"float: right;\">Account No. 120<\/span><\/div>\r\n<\/caption>\r\n<thead>\r\n<tr aria-hidden=\"true\">\r\n<td colspan=\"8\"><\/td>\r\n<\/tr>\r\n<tr style=\"text-transform: uppercase;\">\r\n<th class=\"c\" colspan=\"2\" rowspan=\"2\" scope=\"col\">Date<\/th>\r\n<th class=\"c\" rowspan=\"2\" scope=\"col\">Item<\/th>\r\n<th class=\"c\" rowspan=\"2\" scope=\"col\">Post. Ref.<\/th>\r\n<th class=\"c\" rowspan=\"2\" scope=\"col\">Debit<\/th>\r\n<th class=\"c\" rowspan=\"2\" scope=\"col\">Credit<\/th>\r\n<th class=\"c\" colspan=\"2\" scope=\"col\">Balance<\/th>\r\n<\/tr>\r\n<tr style=\"text-transform: uppercase;\">\r\n<th class=\"c\" scope=\"col\">Debit<\/th>\r\n<th class=\"c\" scope=\"col\">Credit<\/th>\r\n<\/tr>\r\n<\/thead>\r\n<tbody>\r\n<tr>\r\n<td>20--<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<td><\/td>\r\n<td><\/td>\r\n<td class=\"c\">ABE<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<th scope=\"row\">Oct.<\/th>\r\n<th class=\"l\" scope=\"row\">20<\/th>\r\n<td class=\"c\">cleaning inv. NN1016<\/td>\r\n<td><\/td>\r\n<td class=\"r\">1,000.00<\/td>\r\n<td><\/td>\r\n<td class=\"r\"><\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<th><span class=\"u-sr-only\">Oct.<\/span><\/th>\r\n<th class=\"l\" scope=\"row\">30<\/th>\r\n<td class=\"c\">payment on account<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td class=\"r\">1,000.00<\/td>\r\n<td class=\"r\">0.00<\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr aria-hidden=\"true\">\r\n<td colspan=\"8\"><\/td>\r\n<\/tr>\r\n<tr>\r\n<td><\/td>\r\n<td><\/td>\r\n<td class=\"c\">MPAC<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<th scope=\"row\">Oct.<\/th>\r\n<th class=\"l\" scope=\"row\">20<\/th>\r\n<td class=\"c\">cleaning inv. NN1019<\/td>\r\n<td><\/td>\r\n<td class=\"r\">1,750.00<\/td>\r\n<td><\/td>\r\n<td class=\"r\">1,750.00<\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr aria-hidden=\"true\">\r\n<td colspan=\"8\"><\/td>\r\n<\/tr>\r\n<tr>\r\n<td><\/td>\r\n<td><\/td>\r\n<td class=\"c\">National City<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<th scope=\"row\">Oct.<\/th>\r\n<th class=\"l\" scope=\"row\">20<\/th>\r\n<td class=\"c\">cleaning inv. NN1017<\/td>\r\n<td><\/td>\r\n<td class=\"r\">2,500.00<\/td>\r\n<td><\/td>\r\n<td class=\"r\"><\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<th><span class=\"u-sr-only\">Oct.<\/span><\/th>\r\n<th class=\"l\" scope=\"row\">30<\/th>\r\n<td class=\"c\">payment on account<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td class=\"r\">600.00<\/td>\r\n<td class=\"r\">1,900.00<\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr aria-hidden=\"true\">\r\n<td colspan=\"8\"><\/td>\r\n<\/tr>\r\n<tr>\r\n<td><\/td>\r\n<td><\/td>\r\n<td class=\"c\">Our Town Properties<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<th scope=\"row\">Oct.<\/th>\r\n<th class=\"l\" scope=\"row\">20<\/th>\r\n<td class=\"c\">cleaning inv. NN1018<\/td>\r\n<td><\/td>\r\n<td class=\"r\">2,000.00<\/td>\r\n<td><\/td>\r\n<td class=\"r\">2,000.00<\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr aria-hidden=\"true\">\r\n<td colspan=\"8\"><\/td>\r\n<\/tr>\r\n<tr>\r\n<td><\/td>\r\n<td><\/td>\r\n<td class=\"c\">Total<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td class=\"r\">5,650.00<\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n\r\nBoth ledgers, the general (control) and the subsidiary (detail) are created from the same journal entries that are created from the same source data, so they always, always have to match perfectly. In this case, they show our customers owe us $5,650 for work we have done.\r\n\r\nLet\u2019s say in November we discover Our Town Properties went out of business and we decide there is no hope we will collect any of the $2,000 it owes us. In reality, we wouldn\u2019t give up that fast\u2014we\u2019d be attempting to collect for months, Our Town Properties would file for bankruptcy, and there would be a waiting period, etc. But for illustration purposes, let\u2019s just say our customer just packed up and disappeared.\r\n\r\nWe would \u201cwrite off\u201d the account. We don\u2019t reduce revenue because we earned that $2,000. Instead, we create an expense account called Bad Debt Expense, and we make the following entry (most likely an adjusting journal entry at the end of November):\r\n<table class=\"fin-table gridded\"><caption class=\"u-clearfix\"><span style=\"text-transform: uppercase;\">Journal<\/span><\/caption>\r\n<thead>\r\n<tr aria-hidden=\"true\">\r\n<td colspan=\"5\"><\/td>\r\n<\/tr>\r\n<tr>\r\n<th scope=\"col\">Date<\/th>\r\n<th scope=\"col\">Description<\/th>\r\n<th scope=\"col\">Post. Ref.<\/th>\r\n<th scope=\"col\">Debit<\/th>\r\n<th scope=\"col\">Credit<\/th>\r\n<\/tr>\r\n<\/thead>\r\n<tbody>\r\n<tr>\r\n<td>20--<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<th scope=\"row\">Nov 30<\/th>\r\n<td>Bad Debt Expense<\/td>\r\n<td class=\"r\">550<\/td>\r\n<td class=\"r\">2,000.00<\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<th><span class=\"u-sr-only\">Nov 30<\/span><\/th>\r\n<td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts Receivable<\/td>\r\n<td class=\"r\">120<\/td>\r\n<td class=\"r\"><\/td>\r\n<td class=\"r\">2,000.00<\/td>\r\n<\/tr>\r\n<tr>\r\n<th><span class=\"u-sr-only\">Nov 30<\/span><\/th>\r\n<td>To write off Our Town Properties receivable<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n\r\nOnce we post this entry, we see the following in the GL control account (we\u2019re ignoring the fact there would be a host of other transactions in November):\r\n<table class=\"fin-table gridded\">\r\n  <caption class=\"u-clearfix\">\r\n    <div style=\"text-transform:uppercase;\">General Ledger<\/div>\r\n    <div><span style=\"float: left;\">Account: Accounts Receivable<\/span><span style=\"float: right;\">Account No. 120<\/span><\/div>\r\n  <\/caption>\r\n  <thead>\r\n    <tr aria-hidden=\"true\">\r\n      <td colspan=\"8\">&nbsp;<\/td>\r\n    <\/tr>\r\n    <tr style=\"text-transform:uppercase;\">\r\n      <th class=\"c\" colspan=\"2\" rowspan=\"2\" scope=\"col\">Date<\/th>\r\n      <th class=\"c\" rowspan=\"2\" scope=\"col\">Item<\/th>\r\n      <th class=\"c\" rowspan=\"2\" scope=\"col\">Post. Ref.<\/th>\r\n      <th class=\"c\" rowspan=\"2\" scope=\"col\">Debit<\/th>\r\n      <th class=\"c\" rowspan=\"2\" scope=\"col\">Credit<\/th>\r\n      <th class=\"c\" colspan=\"2\" scope=\"col\">Balance<\/th>\r\n    <\/tr>\r\n    <tr style=\"text-transform:uppercase;\">\r\n      <th class=\"c\" scope=\"col\">Debit<\/th>\r\n      <th class=\"c\" scope=\"col\">Credit<\/th>\r\n    <\/tr>\r\n  <\/thead>\r\n  <tbody>\r\n\r\n<tr>\r\n<td>20--<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n      <th scope=\"row\">Oct<\/th>\r\n      <th class=\"l\" scope=\"row\">1<\/th>\r\n      <th scope=\"row\"><em>Balance<\/em><\/th>\r\n<td>a<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td>0.00<\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n      <th><span class=\"u-sr-only\">Oct<\/span><\/th>\r\n<td class=\"l\">20<\/td>\r\n<td><\/td>\r\n<td>GJ1<\/td>\r\n<td class=\"r\">7,250.00<\/td>\r\n<td><\/td>\r\n<td class=\"r\">7,250.00<\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n      <th><span class=\"u-sr-only\">Oct<\/span><\/th>\r\n<td class=\"l\">30<\/td>\r\n<td><\/td>\r\n<td>GJ2<\/td>\r\n<td><\/td>\r\n<td class=\"r\">1,600.00<\/td>\r\n<td class=\"r\">5,650.00<\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n      <th scope=\"row \"  class=\"highlight-green\">Nov<\/th>\r\n<td class=\"l highlight-green\">30<\/td>\r\n<td><\/td>\r\n<td class=\"highlight-green\">GJ3<\/td>\r\n<td><\/td>\r\n<td class=\"r highlight-green\">2,000.00<\/td>\r\n<td class=\"r highlight\">3,650.00<\/td>\r\n<td><\/td>\r\n<\/tr>\r\n  <\/tbody>\r\n  <tbody>\r\n    <tr aria-hidden=\"true\">\r\n      <td colspan=\"8\">&nbsp;<\/td>\r\n    <\/tr>\r\n  <\/tbody>\r\n<\/table>\r\n\r\nAnd we update the subsidiary ledger as well:\r\n<table class=\"fin-table gridded\"><caption class=\"u-clearfix\">\r\n<div style=\"text-transform: uppercase;\">Subsidiary Ledger<\/div>\r\n<div><span style=\"float: left;\">Account: Accounts Receivable<\/span><span style=\"float: right;\">Account No. 120<\/span><\/div>\r\n<\/caption>\r\n<thead>\r\n<tr aria-hidden=\"true\">\r\n<td colspan=\"8\"><\/td>\r\n<\/tr>\r\n<tr style=\"text-transform: uppercase;\">\r\n<th class=\"c\" colspan=\"2\" rowspan=\"2\" scope=\"col\">Date<\/th>\r\n<th class=\"c\" rowspan=\"2\" scope=\"col\">Item<\/th>\r\n<th class=\"c\" rowspan=\"2\" scope=\"col\">Post. Ref.<\/th>\r\n<th class=\"c\" rowspan=\"2\" scope=\"col\">Debit<\/th>\r\n<th class=\"c\" rowspan=\"2\" scope=\"col\">Credit<\/th>\r\n<th class=\"c\" colspan=\"2\" scope=\"col\">Balance<\/th>\r\n<\/tr>\r\n<tr style=\"text-transform: uppercase;\">\r\n<th class=\"c\" scope=\"col\">Debit<\/th>\r\n<th class=\"c\" scope=\"col\">Credit<\/th>\r\n<\/tr>\r\n<\/thead>\r\n<tbody>\r\n<tr>\r\n<td>20--<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<td><\/td>\r\n<td><\/td>\r\n<td class=\"c\">ABE<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<th scope=\"row\">Oct.<\/th>\r\n<th class=\"l\" scope=\"row\">20<\/th>\r\n<td class=\"c\">cleaning inv. NN1016<\/td>\r\n<td><\/td>\r\n<td class=\"r\">1,000.00<\/td>\r\n<td><\/td>\r\n<td class=\"r\"><\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<th><span class=\"u-sr-only\">Oct.<\/span><\/th>\r\n<th class=\"l\" scope=\"row\">30<\/th>\r\n<td class=\"c\">payment on account<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td class=\"r\">1,000.00<\/td>\r\n<td class=\"r\">0.00<\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr aria-hidden=\"true\">\r\n<td colspan=\"8\"><\/td>\r\n<\/tr>\r\n<tr>\r\n<td><\/td>\r\n<td><\/td>\r\n<td class=\"c\">MPAC<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<th scope=\"row\">Oct.<\/th>\r\n<th class=\"l\" scope=\"row\">20<\/th>\r\n<td class=\"c\">cleaning inv. NN1019<\/td>\r\n<td><\/td>\r\n<td class=\"r\">1,750.00<\/td>\r\n<td><\/td>\r\n<td class=\"r\">1,750.00<\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr aria-hidden=\"true\">\r\n<td colspan=\"8\"><\/td>\r\n<\/tr>\r\n<tr>\r\n<td><\/td>\r\n<td><\/td>\r\n<td class=\"c\">National City<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<th scope=\"row\">Oct.<\/th>\r\n<th class=\"l\" scope=\"row\">20<\/th>\r\n<td class=\"c\">cleaning inv. NN1017<\/td>\r\n<td><\/td>\r\n<td class=\"r\">2,500.00<\/td>\r\n<td><\/td>\r\n<td class=\"r\"><\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<th><span class=\"u-sr-only\">Oct.<\/span><\/th>\r\n<th class=\"l\" scope=\"row\">30<\/th>\r\n<td class=\"c\">payment on account<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td class=\"r\">600.00<\/td>\r\n<td class=\"r\">1,900.00<\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr aria-hidden=\"true\">\r\n<td colspan=\"8\"><\/td>\r\n<\/tr>\r\n<tr>\r\n<td><\/td>\r\n<td><\/td>\r\n<td class=\"c\">Our Town Properties<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<th scope=\"row\">Oct.<\/th>\r\n<th class=\"l\" scope=\"row\">20<\/th>\r\n<td class=\"c\">cleaning inv. NN1018<\/td>\r\n<td><\/td>\r\n<td class=\"r\">2,000.00<\/td>\r\n<td><\/td>\r\n<td class=\"r\"><\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<th scope=\"row\" class=\"highlight-green\">Nov<\/th>\r\n<th class=\"l highlight-green\" scope=\"row\">30<\/th>\r\n<td class=\"c highlight-green\">account written off<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td class=\"r highlight-green\">2,000.00<\/td>\r\n<td class=\"r\">0.00<\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr aria-hidden=\"true\">\r\n<td colspan=\"8\"><\/td>\r\n<\/tr>\r\n<tr>\r\n<td><\/td>\r\n<td><\/td>\r\n<td class=\"c\">Total<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td class=\"r highlight\">3,650.00<\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n\r\nWe also have an expense account now called Bad Debt Expense with a debit balance of $2,000 that will act as an offset of November revenues when we calculate net income.\r\n\r\nNote that you should be calling both MPAC and National City at this point to ask for payment or to make other arrangements. Normal business practice is to require payment within 30 days (called \u201cnet 30\u201d), but it\u2019s also possible NeatNiks is allowing 45 days or even 60 days to pay. In any case, by the end of November, the October revenues should be mostly collected.\r\n\r\nWriting off a bad account when its uncollectibility is certain is called the direct write-off method.\r\n\r\nThis is the method required by the Internal Revenue Code (as of 2020\u2014of course, this could change at some point). The drafters of the IRC wanted to make sure companies weren\u2019t trying to manipulate taxable income by writing off accounts that weren\u2019t really uncollectible. This practice makes sense, except that accrual basis income requires matching revenues and expenses, and the direct write-off method is a violation of that principle. In this case, we recognized revenue in October, but then recognized the expense in November. This difference isn\u2019t critical if we are looking at net income on an annual basis, but if we are analyzing net income monthly, it can skew our results. For example, if large companies recognize revenue in 2020, and then recognize the bad debts in 2021 or even 2020 when they are identified, those companies are definitely violating the matching principle.\r\n\r\nHow can we match bad debt expense to revenue when we don\u2019t yet know which revenues are going to be uncollectible?\r\n\r\nThe Financial Accounting Standards Board (FASB) came up with GAAP to address this issue. But before we discuss that issue, it\u2019s time to check your understanding of the direct write-off method of accounting for bad debts.\r\n<div class=\"textbox tryit\">\r\n<h3>practice question<\/h3>\r\nhttps:\/\/assessments.lumenlearning.com\/assessments\/23737\r\n\r\n[ohm_question]204359-204362-204363[\/ohm_question]\r\n\r\n<\/div>","rendered":"<div class=\"textbox learning-objectives\">\n<h3>Learning Outcomes<\/h3>\n<ul>\n<li style=\"font-weight: 400;\">Apply the direct write-off method of accounting for bad debts<\/li>\n<\/ul>\n<\/div>\n<p>At the end of October, NeatNiks\u2019s accounts receivable ledger page looked like this:<\/p>\n<table class=\"fin-table gridded\">\n<caption class=\"u-clearfix\">\n    <\/caption>\n<thead>\n<tr aria-hidden=\"true\">\n<td colspan=\"8\">&nbsp;<\/td>\n<\/tr>\n<tr style=\"text-transform:uppercase;\">\n<th class=\"c\" colspan=\"2\" rowspan=\"2\" scope=\"col\">Date<\/th>\n<th class=\"c\" rowspan=\"2\" scope=\"col\">Item<\/th>\n<th class=\"c\" rowspan=\"2\" scope=\"col\">Post. Ref.<\/th>\n<th class=\"c\" rowspan=\"2\" scope=\"col\">Debit<\/th>\n<th class=\"c\" rowspan=\"2\" scope=\"col\">Credit<\/th>\n<th class=\"c\" colspan=\"2\" scope=\"col\">Balance<\/th>\n<\/tr>\n<tr style=\"text-transform:uppercase;\">\n<th class=\"c\" scope=\"col\">Debit<\/th>\n<th class=\"c\" scope=\"col\">Credit<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>20&#8211;<\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th scope=\"row\">Oct<\/th>\n<th class=\"l\" scope=\"row\">1<\/th>\n<th scope=\"row\"><em>Balance<\/em><\/th>\n<td>a<\/td>\n<td><\/td>\n<td><\/td>\n<td>0.00<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th><span class=\"u-sr-only\">Oct<\/span><\/th>\n<td class=\"l\">20<\/td>\n<td><\/td>\n<td>GJ1<\/td>\n<td class=\"r\">7,250.00<\/td>\n<td><\/td>\n<td class=\"r\">7,250.00<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th><span class=\"u-sr-only\">Oct<\/span><\/th>\n<td class=\"l\">30<\/td>\n<td><\/td>\n<td>GJ2<\/td>\n<td><\/td>\n<td class=\"r\">1,600.00<\/td>\n<td class=\"r\">5,650.00<\/td>\n<td><\/td>\n<\/tr>\n<\/tbody>\n<tbody>\n<tr aria-hidden=\"true\">\n<td colspan=\"8\">&nbsp;<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>And the subsidiary ledger total matched the control account:<\/p>\n<table class=\"fin-table gridded\">\n<caption class=\"u-clearfix\">\n<\/caption>\n<thead>\n<tr aria-hidden=\"true\">\n<td colspan=\"8\"><\/td>\n<\/tr>\n<tr style=\"text-transform: uppercase;\">\n<th class=\"c\" colspan=\"2\" rowspan=\"2\" scope=\"col\">Date<\/th>\n<th class=\"c\" rowspan=\"2\" scope=\"col\">Item<\/th>\n<th class=\"c\" rowspan=\"2\" scope=\"col\">Post. Ref.<\/th>\n<th class=\"c\" rowspan=\"2\" scope=\"col\">Debit<\/th>\n<th class=\"c\" rowspan=\"2\" scope=\"col\">Credit<\/th>\n<th class=\"c\" colspan=\"2\" scope=\"col\">Balance<\/th>\n<\/tr>\n<tr style=\"text-transform: uppercase;\">\n<th class=\"c\" scope=\"col\">Debit<\/th>\n<th class=\"c\" scope=\"col\">Credit<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>20&#8211;<\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<td><\/td>\n<td><\/td>\n<td class=\"c\">ABE<\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th scope=\"row\">Oct.<\/th>\n<th class=\"l\" scope=\"row\">20<\/th>\n<td class=\"c\">cleaning inv. NN1016<\/td>\n<td><\/td>\n<td class=\"r\">1,000.00<\/td>\n<td><\/td>\n<td class=\"r\"><\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th><span class=\"u-sr-only\">Oct.<\/span><\/th>\n<th class=\"l\" scope=\"row\">30<\/th>\n<td class=\"c\">payment on account<\/td>\n<td><\/td>\n<td><\/td>\n<td class=\"r\">1,000.00<\/td>\n<td class=\"r\">0.00<\/td>\n<td><\/td>\n<\/tr>\n<tr aria-hidden=\"true\">\n<td colspan=\"8\"><\/td>\n<\/tr>\n<tr>\n<td><\/td>\n<td><\/td>\n<td class=\"c\">MPAC<\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th scope=\"row\">Oct.<\/th>\n<th class=\"l\" scope=\"row\">20<\/th>\n<td class=\"c\">cleaning inv. NN1019<\/td>\n<td><\/td>\n<td class=\"r\">1,750.00<\/td>\n<td><\/td>\n<td class=\"r\">1,750.00<\/td>\n<td><\/td>\n<\/tr>\n<tr aria-hidden=\"true\">\n<td colspan=\"8\"><\/td>\n<\/tr>\n<tr>\n<td><\/td>\n<td><\/td>\n<td class=\"c\">National City<\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th scope=\"row\">Oct.<\/th>\n<th class=\"l\" scope=\"row\">20<\/th>\n<td class=\"c\">cleaning inv. NN1017<\/td>\n<td><\/td>\n<td class=\"r\">2,500.00<\/td>\n<td><\/td>\n<td class=\"r\"><\/td>\n<td><\/td>\n<\/tr>\n<\/tbody>\n<tr aria-hidden=\"true\">\n<td colspan=\"8\"><\/td>\n<\/tr>\n<tr>\n<td><\/td>\n<td><\/td>\n<td class=\"c\">Our Town Properties<\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th scope=\"row\">Oct.<\/th>\n<th class=\"l\" scope=\"row\">20<\/th>\n<td class=\"c\">cleaning inv. NN1018<\/td>\n<td><\/td>\n<td class=\"r\">2,000.00<\/td>\n<td><\/td>\n<td class=\"r\">2,000.00<\/td>\n<td><\/td>\n<\/tr>\n<tr aria-hidden=\"true\">\n<td colspan=\"8\"><\/td>\n<\/tr>\n<tr>\n<td><\/td>\n<td><\/td>\n<td class=\"c\">Total<\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td class=\"r\">5,650.00<\/td>\n<td><\/td>\n<\/tr>\n<\/table>\n<p>Both ledgers, the general (control) and the subsidiary (detail) are created from the same journal entries that are created from the same source data, so they always, always have to match perfectly. In this case, they show our customers owe us $5,650 for work we have done.<\/p>\n<p>Let\u2019s say in November we discover Our Town Properties went out of business and we decide there is no hope we will collect any of the $2,000 it owes us. In reality, we wouldn\u2019t give up that fast\u2014we\u2019d be attempting to collect for months, Our Town Properties would file for bankruptcy, and there would be a waiting period, etc. But for illustration purposes, let\u2019s just say our customer just packed up and disappeared.<\/p>\n<p>We would \u201cwrite off\u201d the account. We don\u2019t reduce revenue because we earned that $2,000. Instead, we create an expense account called Bad Debt Expense, and we make the following entry (most likely an adjusting journal entry at the end of November):<\/p>\n<table class=\"fin-table gridded\">\n<caption class=\"u-clearfix\"><span style=\"text-transform: uppercase;\">Journal<\/span><\/caption>\n<thead>\n<tr aria-hidden=\"true\">\n<td colspan=\"5\"><\/td>\n<\/tr>\n<tr>\n<th scope=\"col\">Date<\/th>\n<th scope=\"col\">Description<\/th>\n<th scope=\"col\">Post. Ref.<\/th>\n<th scope=\"col\">Debit<\/th>\n<th scope=\"col\">Credit<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>20&#8211;<\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th scope=\"row\">Nov 30<\/th>\n<td>Bad Debt Expense<\/td>\n<td class=\"r\">550<\/td>\n<td class=\"r\">2,000.00<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th><span class=\"u-sr-only\">Nov 30<\/span><\/th>\n<td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts Receivable<\/td>\n<td class=\"r\">120<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">2,000.00<\/td>\n<\/tr>\n<tr>\n<th><span class=\"u-sr-only\">Nov 30<\/span><\/th>\n<td>To write off Our Town Properties receivable<\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>Once we post this entry, we see the following in the GL control account (we\u2019re ignoring the fact there would be a host of other transactions in November):<\/p>\n<table class=\"fin-table gridded\">\n<caption class=\"u-clearfix\">\n    <\/caption>\n<thead>\n<tr aria-hidden=\"true\">\n<td colspan=\"8\">&nbsp;<\/td>\n<\/tr>\n<tr style=\"text-transform:uppercase;\">\n<th class=\"c\" colspan=\"2\" rowspan=\"2\" scope=\"col\">Date<\/th>\n<th class=\"c\" rowspan=\"2\" scope=\"col\">Item<\/th>\n<th class=\"c\" rowspan=\"2\" scope=\"col\">Post. Ref.<\/th>\n<th class=\"c\" rowspan=\"2\" scope=\"col\">Debit<\/th>\n<th class=\"c\" rowspan=\"2\" scope=\"col\">Credit<\/th>\n<th class=\"c\" colspan=\"2\" scope=\"col\">Balance<\/th>\n<\/tr>\n<tr style=\"text-transform:uppercase;\">\n<th class=\"c\" scope=\"col\">Debit<\/th>\n<th class=\"c\" scope=\"col\">Credit<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>20&#8211;<\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th scope=\"row\">Oct<\/th>\n<th class=\"l\" scope=\"row\">1<\/th>\n<th scope=\"row\"><em>Balance<\/em><\/th>\n<td>a<\/td>\n<td><\/td>\n<td><\/td>\n<td>0.00<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th><span class=\"u-sr-only\">Oct<\/span><\/th>\n<td class=\"l\">20<\/td>\n<td><\/td>\n<td>GJ1<\/td>\n<td class=\"r\">7,250.00<\/td>\n<td><\/td>\n<td class=\"r\">7,250.00<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th><span class=\"u-sr-only\">Oct<\/span><\/th>\n<td class=\"l\">30<\/td>\n<td><\/td>\n<td>GJ2<\/td>\n<td><\/td>\n<td class=\"r\">1,600.00<\/td>\n<td class=\"r\">5,650.00<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th scope=\"row\" class=\"highlight-green\">Nov<\/th>\n<td class=\"l highlight-green\">30<\/td>\n<td><\/td>\n<td class=\"highlight-green\">GJ3<\/td>\n<td><\/td>\n<td class=\"r highlight-green\">2,000.00<\/td>\n<td class=\"r highlight\">3,650.00<\/td>\n<td><\/td>\n<\/tr>\n<\/tbody>\n<tbody>\n<tr aria-hidden=\"true\">\n<td colspan=\"8\">&nbsp;<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>And we update the subsidiary ledger as well:<\/p>\n<table class=\"fin-table gridded\">\n<caption class=\"u-clearfix\">\n<\/caption>\n<thead>\n<tr aria-hidden=\"true\">\n<td colspan=\"8\"><\/td>\n<\/tr>\n<tr style=\"text-transform: uppercase;\">\n<th class=\"c\" colspan=\"2\" rowspan=\"2\" scope=\"col\">Date<\/th>\n<th class=\"c\" rowspan=\"2\" scope=\"col\">Item<\/th>\n<th class=\"c\" rowspan=\"2\" scope=\"col\">Post. Ref.<\/th>\n<th class=\"c\" rowspan=\"2\" scope=\"col\">Debit<\/th>\n<th class=\"c\" rowspan=\"2\" scope=\"col\">Credit<\/th>\n<th class=\"c\" colspan=\"2\" scope=\"col\">Balance<\/th>\n<\/tr>\n<tr style=\"text-transform: uppercase;\">\n<th class=\"c\" scope=\"col\">Debit<\/th>\n<th class=\"c\" scope=\"col\">Credit<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>20&#8211;<\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<td><\/td>\n<td><\/td>\n<td class=\"c\">ABE<\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th scope=\"row\">Oct.<\/th>\n<th class=\"l\" scope=\"row\">20<\/th>\n<td class=\"c\">cleaning inv. NN1016<\/td>\n<td><\/td>\n<td class=\"r\">1,000.00<\/td>\n<td><\/td>\n<td class=\"r\"><\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th><span class=\"u-sr-only\">Oct.<\/span><\/th>\n<th class=\"l\" scope=\"row\">30<\/th>\n<td class=\"c\">payment on account<\/td>\n<td><\/td>\n<td><\/td>\n<td class=\"r\">1,000.00<\/td>\n<td class=\"r\">0.00<\/td>\n<td><\/td>\n<\/tr>\n<tr aria-hidden=\"true\">\n<td colspan=\"8\"><\/td>\n<\/tr>\n<tr>\n<td><\/td>\n<td><\/td>\n<td class=\"c\">MPAC<\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th scope=\"row\">Oct.<\/th>\n<th class=\"l\" scope=\"row\">20<\/th>\n<td class=\"c\">cleaning inv. NN1019<\/td>\n<td><\/td>\n<td class=\"r\">1,750.00<\/td>\n<td><\/td>\n<td class=\"r\">1,750.00<\/td>\n<td><\/td>\n<\/tr>\n<tr aria-hidden=\"true\">\n<td colspan=\"8\"><\/td>\n<\/tr>\n<tr>\n<td><\/td>\n<td><\/td>\n<td class=\"c\">National City<\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th scope=\"row\">Oct.<\/th>\n<th class=\"l\" scope=\"row\">20<\/th>\n<td class=\"c\">cleaning inv. NN1017<\/td>\n<td><\/td>\n<td class=\"r\">2,500.00<\/td>\n<td><\/td>\n<td class=\"r\"><\/td>\n<td><\/td>\n<\/tr>\n<\/tbody>\n<tr aria-hidden=\"true\">\n<td colspan=\"8\"><\/td>\n<\/tr>\n<tr>\n<td><\/td>\n<td><\/td>\n<td class=\"c\">Our Town Properties<\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th scope=\"row\">Oct.<\/th>\n<th class=\"l\" scope=\"row\">20<\/th>\n<td class=\"c\">cleaning inv. NN1018<\/td>\n<td><\/td>\n<td class=\"r\">2,000.00<\/td>\n<td><\/td>\n<td class=\"r\"><\/td>\n<td><\/td>\n<\/tr>\n<tr aria-hidden=\"true\">\n<td colspan=\"8\"><\/td>\n<\/tr>\n<tr>\n<td><\/td>\n<td><\/td>\n<td class=\"c\">Total<\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td class=\"r highlight\">3,650.00<\/td>\n<td><\/td>\n<\/tr>\n<\/table>\n<p>We also have an expense account now called Bad Debt Expense with a debit balance of $2,000 that will act as an offset of November revenues when we calculate net income.<\/p>\n<p>Note that you should be calling both MPAC and National City at this point to ask for payment or to make other arrangements. Normal business practice is to require payment within 30 days (called \u201cnet 30\u201d), but it\u2019s also possible NeatNiks is allowing 45 days or even 60 days to pay. In any case, by the end of November, the October revenues should be mostly collected.<\/p>\n<p>Writing off a bad account when its uncollectibility is certain is called the direct write-off method.<\/p>\n<p>This is the method required by the Internal Revenue Code (as of 2020\u2014of course, this could change at some point). The drafters of the IRC wanted to make sure companies weren\u2019t trying to manipulate taxable income by writing off accounts that weren\u2019t really uncollectible. This practice makes sense, except that accrual basis income requires matching revenues and expenses, and the direct write-off method is a violation of that principle. In this case, we recognized revenue in October, but then recognized the expense in November. This difference isn\u2019t critical if we are looking at net income on an annual basis, but if we are analyzing net income monthly, it can skew our results. For example, if large companies recognize revenue in 2020, and then recognize the bad debts in 2021 or even 2020 when they are identified, those companies are definitely violating the matching principle.<\/p>\n<p>How can we match bad debt expense to revenue when we don\u2019t yet know which revenues are going to be uncollectible?<\/p>\n<p>The Financial Accounting Standards Board (FASB) came up with GAAP to address this issue. But before we discuss that issue, it\u2019s time to check your understanding of the direct write-off method of accounting for bad debts.<\/p>\n<div class=\"textbox tryit\">\n<h3>practice question<\/h3>\n<p>\t<iframe id=\"lumen_assessment_23737\" class=\"resizable\" src=\"https:\/\/assessments.lumenlearning.com\/assessments\/load?assessment_id=23737&#38;embed=1&#38;external_user_id=&#38;external_context_id=&#38;iframe_resize_id=lumen_assessment_23737\" frameborder=\"0\" style=\"border:none;width:100%;height:100%;min-height:400px;\"><br \/>\n\t<\/iframe><\/p>\n<p><iframe loading=\"lazy\" id=\"ohm204359\" class=\"resizable\" src=\"https:\/\/ohm.lumenlearning.com\/multiembedq.php?id=204359-204362-204363&theme=oea&iframe_resize_id=ohm204359&show_question_numbers\" width=\"100%\" height=\"150\"><\/iframe><\/p>\n<\/div>\n\n\t\t\t <section class=\"citations-section\" role=\"contentinfo\">\n\t\t\t <h3>Candela Citations<\/h3>\n\t\t\t\t\t <div>\n\t\t\t\t\t\t <div id=\"citation-list-3547\">\n\t\t\t\t\t\t\t <div class=\"licensing\"><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Original<\/div><ul class=\"citation-list\"><li>Direct Write Off of Bad Accounts. <strong>Authored by<\/strong>: Joseph Cooke. <strong>Provided by<\/strong>: Lumen Learning. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><\/ul><\/div>\n\t\t\t\t\t\t <\/div>\n\t\t\t\t\t <\/div>\n\t\t\t <\/section>","protected":false},"author":90270,"menu_order":6,"template":"","meta":{"_candela_citation":"[{\"type\":\"original\",\"description\":\"Direct Write Off of Bad Accounts\",\"author\":\"Joseph Cooke\",\"organization\":\"Lumen Learning\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"}]","CANDELA_OUTCOMES_GUID":"","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"class_list":["post-3547","chapter","type-chapter","status-publish","hentry"],"part":133,"_links":{"self":[{"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/pressbooks\/v2\/chapters\/3547","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/wp\/v2\/users\/90270"}],"version-history":[{"count":12,"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/pressbooks\/v2\/chapters\/3547\/revisions"}],"predecessor-version":[{"id":5650,"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/pressbooks\/v2\/chapters\/3547\/revisions\/5650"}],"part":[{"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/pressbooks\/v2\/parts\/133"}],"metadata":[{"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/pressbooks\/v2\/chapters\/3547\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/wp\/v2\/media?parent=3547"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/pressbooks\/v2\/chapter-type?post=3547"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/wp\/v2\/contributor?post=3547"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/wp\/v2\/license?post=3547"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}