An aging of a company's accounts receivable indicates that $4,500 are estimated to be uncollectible. If 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 Debt Expense for $4,500.
B) debit to Bad Debt Expense for $6,100.
C) debit to Bad Debt Expense for $2,900.
D) credit to Allowance for Doubtful Accounts for $4,500.

Question

Quizplus · Accepted Answer

The adjustment needed is to bring the Allowance for Doubtful Accounts to the estimated uncollectible amount of $4,500. Since there is a $1,600 debit balance, you need to add $6,100 to reach the desired credit balance of $4,500.

An Aging of a Company's Accounts Receivable Indicates That $4,500