Asked by Timothy Robinson on May 04, 2024
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At the end of a period (before adjustment), Allowance for Doubtful Accounts has a credit balance of $5,000. The Accounts Receivable balance is analyzed by aging the accounts and the amount estimated to be uncollectible is $50,000. The amount to be recorded in the adjusting entry for the bad debt expense is $45,000.
Allowance for Doubtful Accounts
A contra-account reducing accounts receivable on a balance sheet, reflecting the amount of receivables a company believes it will not collect.
Estimated Uncollectible
The anticipated portion of receivables that a company expects not to collect.
Adjusting Entry
A journal entry made at the end of an accounting period to allocate income and expenditure to the appropriate years.
- Acquire an understanding of the Allowance for Doubtful Accounts concept and its importance in the adaptation of ledger adjustments.
- Elucidate the procedure to forecast bad accounts utilizing multiple approaches.
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Learning Objectives
- Acquire an understanding of the Allowance for Doubtful Accounts concept and its importance in the adaptation of ledger adjustments.
- Elucidate the procedure to forecast bad accounts utilizing multiple approaches.
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