An aging of a company's accounts receivable indicates 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 aA. debit to Bad Debt Expense for $8,600. B. debit to Bad Debt Expense for $7,900. C. debit to Bad Debt Expense for $7,200. D. credit to Allowance for Doubtful Accounts for $700

Question

Business

Ari Cameron

25 February, 10:22

An aging of a company's accounts receivable indicates 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 aA. debit to Bad Debt Expense for $8,600. B. debit to Bad Debt Expense for $7,900. C. debit to Bad Debt Expense for $7,200. D. credit to Allowance for Doubtful Accounts for $700

+3

Answers (1)

Know the Answer?

Xiomara · Answer 1

C. debit to Bad Debt Expense for $7,200.

Explanation:

The company needs to reflects the total amount in the Allowance for Doubtful Accounts as credit balance, if the balance today it's $700, you need a new entry to adjust the balance with the Bad Debt Expense account.

The entry must be a credit in Bad Debt Expense for $7,200 and the correspondent debit in the Allowance for Doubtful Accounts as credit.