An aging of a company's accounts receivable indicates that $3,000 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $1,200 debit balance, the adjustment to record bad debts for the period will require a
A) debit to Bad Debts Expense for $3,000.
B) debit to Bad Debts Expense for $4,200.
C) debit to Bad Debts Expense for $1,800.
D) credit to Allowance for Doubtful Accounts for $4,000.

Question

Quizplus · Accepted Answer

The adjustment should bring the Allowance for Doubtful Accounts to the estimated uncollectible amount of $3,000. Since there is already a $1,200 debit balance, an additional $4,200 debit to Bad Debts Expense is needed to offset this and reach the $3,000 credit balance.

An Aging of a Company's Accounts Receivable Indicates That $3,000