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

Question

Business

Harley Gill

1 January, 00:08

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

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Answers (1)

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Abby Blackwell · Answer 1

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