Question

An aging of a company’s accounts receivable indicates that estimate of the uncollectible accounts totals $4,000. If Allowance for Doubtful Accounts has a $800 credit balance, the adjustment to record the bad debt expense for the period will require aA. debit to Allowance for Doubtful Accounts for $3,200.B. debit to Bad Debt Expense for $3,200.C. debit to Allowance for Doubtful Accounts for $4,000.D. credit to Allowance for Doubtful Accounts for $4,000

Answer 1

Answer:

B. debit to Bad Debt Expense for $3,200.

Explanation:

In the given question, the total of uncollectible accounts is $4,000 and the allowance for doubtful accounts has an $800 credit balance. The remaining amount which is left i.e $3,200 ($4,000 - $800) is debited to bad debt expense

The journal entry is shown below:

Bad debt expense A/c Dr  $3,200

     To Allowance for Doubtful Accounts $3,200

(Being bad debt expense recorded)