An aging of a company's accounts receivable indicates that $4,200 is estimated to be uncollectible.If Allowance for Doubtful Accounts has a $800 credit balance, the adjustment to record bad debts for the period will require a
A)debit to Bad Debts Expense for $4,200.
B)debit to Allowance for Doubtful Accounts for $3,400.
C)debit to Bad Debts Expense for $3,400.
D)credit to Allowance for Doubtful Accounts for $5,000.

Question

Quizplus · Accepted Answer

The adjustment to record bad debts for the period requires debiting Bad Debts Expense for $3,400, which is the difference between the estimated uncollectible amount ($4,200) and the existing credit balance in the Allowance for Doubtful Accounts ($800). This ensures the allowance account reflects the updated estimate of uncollectible accounts.

An Aging of a Company's Accounts Receivable Indicates That $4,200