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1 July, 18:12

An aging of a company's accounts receivable indicates that $8,000 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $1,100 credit balance, the adjustment to record bad debts for the period will require a a. debit to Bad Debts Expense for $8,000. b. debit to Allowance for Doubtful Accounts for $6,900. c. debit to Bad Debts Expense for $6,900. d. credit to Allowance for Doubtful Accounts for $8,000.

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  1. 1 July, 21:10
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    c. debit to Bad Debts Expense for $6,900.

    Explanation:

    Allowance for Doubtful Accounts $1,100 credit balance,

    Estimated Un collectibles $8000 credit

    Required Adjustment $ 6900 credit

    The adjustment to record bad debts for the period will require a

    c. debit to Bad Debts Expense for $6,900.

    Bad Debt Expense $ 6900 Dr

    Allowance for Doubtful Accounts $ 6900 Cr

    Alternatively if the allowance account had a debit balance the entry would have been posted adding the two amounts.
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