When using the allowance method for bad debts,how should bad debt expense be recorded?
A)as an adjusting entry at the end of the accounting period.
B)when a particular account is written off.
C)whenever the allowance for doubtful accounts has a debit balance.
D)whenever the allowance for doubtful accounts has a zero balance.

Question

Quizplus · Accepted Answer

Bad debt expense should be recorded as an adjusting entry at the end of the accounting period when using the allowance method for bad debts. This is because the allowance for doubtful accounts is an estimate of the amount of accounts receivable that will not be collected. The bad debt expense is recorded to match this estimated amount with the revenues earned during the accounting period. The actual write-off of specific accounts occurs later and does not affect the bad debt expense account.

When Using the Allowance Method for Bad Debts,how Should Bad