Question

1. When the percent of uncollectible accounts on current accounts is 1% and the unadjusted balance in allowance for doubtful accounts is a credit of
$3,250, the entry for bad debt expense is a debit to bad debt expense for $
​

Answer 1

Answer:

Bad debt expense account will be debited with $3,250

Explanation:

It's the principle of double entry that for every debit you will have a credit.

The allowance account is a credit (in effect it reduces your Account receivables by the doubtful debts or to use a business Analyst language it de-risks the Asset balance of the balance sheet)

The Bad debt Account on the other hand is recognized as an expense. To project a realizable net income to our shareholders, because if the debts become uncollectible then our profits and shareholder values are at risk