Estimated uncollectible accounts are recorded as a debit to
A)Allowance for Doubtful Accounts.
B)Bad Debts Expense.
C)Sales.
D)Accounts Receivable.

Question

Quizplus · Accepted Answer

Bad Debts Expense is debited when estimating uncollectible accounts to recognize the expense in the period in which the related sales occur, following the matching principle. This entry increases the expense on the income statement and establishes or increases the allowance for doubtful accounts on the balance sheet.

Estimated Uncollectible Accounts Are Recorded as a Debit to