An aging of a company's accounts receivable indicates that $11,000 is estimated to be uncollectible.If the Allowance for Doubtful Accounts has a $1,600 debit balance, the adjustment to record bad debts for the period will require a
A)debit to Bad Debts Expense for $12,600.
B)debit to Bad Debts Expense for $11,000.
C)debit to Bad Debts Expense for $9,400.
D)debit to Allowance for Doubtful Accounts for $11,000.

Question

Quizplus · Accepted Answer

The correct adjustment is a debit to Bad Debts Expense for $12,600. This is because the existing $1,600 debit balance in the Allowance for Doubtful Accounts needs to be offset to reflect the new estimate of $11,000 being uncollectible, resulting in a total adjustment of $12,600 ($11,000 + $1,600).

An Aging of a Company's Accounts Receivable Indicates That $11,000