Question

An aging of a company's accounts receivable indicates that the estimate of uncollectible receivables totals $7,900. If Allowance for Doubtful Accounts has a $700 credit balance, the adjustment to record the bad debt expense for the period will require a a. credit to Allowance for Doubtful Accounts for $700 b. debit to Bad Debt Expense for $8,600 c. debit to Bad Debt Expense for $7,900 d. debit to Bad Debt Expense for $7,200

Answer 1

Answer:

option d) debit to Bad Debt Expense for $7,200

Explanation:

Data provided :

Total estimated uncollectible receivables of the company = $ 7,900

credit balance for the allowance for doubtful accounts  =  $ 700

Therefore,

the net bad debt expenses of the company = $ 7,900 - $ 700 = $ 7,200

Hence,

the correct answer is option d) debit to Bad Debt Expense for $7,200