Asked by McGwire Midkiff on May 26, 2024
Verified
Allowance for Doubtful Accounts has a debit balance of $600 at the end of the year (before adjustment) , and an analysis of accounts in the customers ledger indicates uncollectible receivables of $13,000. Which of the following entries records the proper adjusting entry for bad debt expense?
A) debit Bad Debt Expense, $600; credit Allowance for Doubtful Accounts, $600
B) debit Bad Debt Expense, $12,400; credit Allowance for Doubtful Accounts, $12,400
C) debit Allowance for Doubtful Accounts, $600; credit Bad Debt Expense, $600
D) debit Bad Debt Expense, $13,600; credit Allowance for Doubtful Accounts, $13,600
Allowance for Doubtful Accounts
An estimate of the receivables that may not be collected, reducing gross receivables to a more realistic net value.
Uncollectible Receivables
Accounts receivable that a company has determined are unlikely to be collected and thus are written off as a bad debt expense.
Bad Debt Expense
An expense reported on the income statement, reflecting the cost of debts that are deemed uncollectible.
- Identify the required modifications for the allowance for doubtful accounts provision.
- Examine and modify the provision for doubtful debts following an analysis of an aging receivables report.
Verified Answer
Learning Objectives
- Identify the required modifications for the allowance for doubtful accounts provision.
- Examine and modify the provision for doubtful debts following an analysis of an aging receivables report.
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