The amount of the adjustment to Allowance for Uncollectible Accounts when the account balance is a $400.00 debit and $5,000.00 of accounts receivable is estimated to be uncollectible would be
A) $400. 00.
B) $4,600. 00.
C) $5,000. 00.
D) $5,400. 00.

Question

Quizplus · Accepted Answer

The correct adjustment is $5,400.00 because the existing $400.00 debit balance in the Allowance for Uncollectible Accounts needs to be offset to zero, and then an additional $5,000.00 needs to be added to reflect the new estimate of uncollectible accounts, totaling $5,400.00.

The Amount of the Adjustment to Allowance for Uncollectible Accounts