Asked by
Naomi Pointer
on Nov 12, 2024Verified
Allowance for Doubtful Accounts has a credit balance of $2,100 at the end of the year (before adjustment) , and an analysis of customers' accounts indicates uncollectible receivables of $19,700. Which of the following entries records the proper adjustment for bad debt expense?
A) debit Allowance for Doubtful Accounts, $17,600; credit Bad Debt Expense, $17,600
B) debit Allowance for Doubtful Accounts, $21,800; credit Bad Debt Expense, $21,800
C) debit Bad Debt Expense, $21,800; credit Allowance for Doubtful Accounts, $21,800
D) debit Bad Debt Expense, $17,600; credit Allowance for Doubtful Accounts, $17,600
Allowance for Doubtful Accounts
A contra-asset account that represents the estimated portion of accounts receivable that may not be collectible.
Uncollectible Receivables
Refers to money owed to a company by its debtors that is unlikely to be paid and is considered a loss.
- Ascertain the essential alterations needed for the allowance for doubtful accounts.
- Inspect and alter the reserve for bad debts in accordance with an aging analysis of receivables.
Verified Answer
AM
Learning Objectives
- Ascertain the essential alterations needed for the allowance for doubtful accounts.
- Inspect and alter the reserve for bad debts in accordance with an aging analysis of receivables.
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