To record estimated uncollectible accounts using the allowance method,the adjusting entry would normally be a debit to:
A)Accounts Receivable and a credit to Allowance for Doubtful Accounts.
B)Bad Debt Expense and a credit to Allowance for Doubtful Accounts.
C)Allowance for Doubtful Accounts and a credit to Accounts Receivable.
D)Bad Debt Expense and a credit to Accounts Receivable.

Question

Quizplus · Accepted Answer

The adjusting entry for estimated uncollectible accounts using the allowance method involves debiting Bad Debt Expense (an expense account) and crediting Allowance for Doubtful Accounts (a contra-asset account). This reflects the increase in the estimated amount of uncollectible accounts, which decreases the net accounts receivable on the balance sheet. Option A is incorrect because it would result in a decrease to both accounts receivable and allowance for doubtful accounts, which doesn't reflect the estimated increase in uncollectible accounts. Option C is incorrect because it would incorrectly increase the balance of accounts receivable. Option D is incorrect because it would decrease accounts receivable, which is not the correct treatment for estimating uncollectible accounts.

To Record Estimated Uncollectible Accounts Using the Allowance Method,the Adjusting