On December 31,prior to adjustment,Allowance for Doubtful Accounts has a credit balance of $200.An aging Analyze of the accounts receivable produces an estimate of $1,000 of probable losses from uncollectible accounts.The adjusting entry needed to record the estimated losses from uncollectible accounts is made for
A) $200.
B) $800.
C) $1,000.
D) $1,200.

Question

Quizplus · Accepted Answer

The allowance for doubtful accounts had a credit balance of $200 before adjustment, indicating that there was previously an estimate for $200 already recorded. The aging analysis identifies $1,000 of additional probable losses, which means that the adjusting entry needs to reflect an increase in the allowance for doubtful accounts of $800 ($1,000 - $200). Therefore, the answer is B) $800.

On December 31,prior to Adjustment,Allowance for Doubtful Accounts Has a Credit