Using the aging method, estimated uncollectible accounts are $3,200. If the balance of Allowance for Doubtful Accounts is $550 credit before adjustment, what is a Bad Debts Expense for the period?
A) $3,750
B) $2,650
C) $3,200
D) $550

Question

Quizplus · Accepted Answer

The Bad Debts Expense for the period is calculated by adjusting the existing Allowance for Doubtful Accounts to the new estimated uncollectible accounts. The adjustment is the difference between the new estimate ($3,200) and the existing credit balance ($550), which is $3,200 - $550 = $2,650.

Using the Aging Method, Estimated Uncollectible Accounts Are $3,200