Which of the following statements is correct?
A)The journal entry to record bad debt expense requires a debit to bad debt expense and a credit to accounts receivable.
B)The journal entry to record bad debt expense requires a debit to bad debt expense and a credit to allowance for doubtful accounts.
C)The journal entry to record the write off of an uncollectible account receivable requires a debit to bad debt expense and a credit to accounts receivable.
D)The journal entry to record the write off of an uncollectible account receivable requires a debit to bad debt expense and a credit to allowance for doubtful accounts.

Question

Quizplus · Accepted Answer

The journal entry to record bad debt expense requires a debit to bad debt expense and a credit to allowance for doubtful accounts. This is because the allowance for doubtful accounts is a contra-asset account that reduces the balance of accounts receivable to reflect the portion of receivables that are expected to be uncollectible. When bad debt expense is recorded, it increases the allowance for doubtful accounts, which in turn reduces the balance of accounts receivable.

Which of the Following Statements Is Correct