Question

Send to Gradebook < Prev Next > Question 21 --/1 View Policies Current Attempt in Progress port An aging of a company's accounts receivable indicates that $15500 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $1180 credit balance, the adjustment to record bad debts for the period will require a debit to Allowance for Doubtful Accounts for $14320 O credit to Allowance for Doubtful Accounts for $15500. Odebit to Bad Debt Expense for $14320. debit to Bad Debt Expense for $15500. Attempts: 0 of 1 used Save for Later Submit Answer

Answer 1

Answer

• As per aging schedule, the adjusted balance of Allowance account SHOULD BE = $ 15,500 CREDIT
• Balance (Unadjusted) already existing in Allowance account = $ 1180 Credit.
• This means the Allowance account needs to be ADDITIONALLY CREDITED with $ 14,320 MORE [15500 – 1180]
• Hence,
  Allowance for Doubtful Account will be credited by $ 14,320, and
  Bad Debt Expense will be debited by $ 14,320
• Correct Answer = Option #3: Debit to Bad Debt Expense for $ 14,320