Question

1. When the percent of uncollectible accounts on current accounts ls 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:

The bad debt account will be debited with $3,250

Explanation:

This explains the principle of double entry. For every debit entry you will have a corresponding credit entry

In recognizing a risk (likely uncollectible debts) to Asset (account receivables) and Net income (overstated Revenue) the Allowance for doubtful debt Account will be credited with a provision (1% which comes to $3,250 as in the case with our question) to draw down the value of our receivables to a more sensible number and our Bad debt expense account takes the debit, to reflect a more defendable Net income to our shareholders