Question

An aging of a company's accounts receivable indicates that the estimate of uncollectible receivables totals $4,636. If Allowance for Doubtful Accounts has a $854 credit balance, the adjustment to record the bad debt expense for the period will require a

A) debit to Bad Debt Expense for $3,782.

B) credit to Allowance for Doubtful Accounts for $854.

C) debit to Bad Debt Expense for $5,490.

D) debit to Bad Debt Expense for $4,636.

Answer 1

Solution:

Journal entry

Particulars	Debit($)	Credit($)
Bad debt expense A/c Dr ($4,636 - $854)	$3,782
To for doubtful accounts allowance A/c		$3,782

So, correct answer is Option (A). debit to Bad Debt Expense for $3,782.