The adjusting entry to record estimated losses from uncollectible accounts consists of a
A)debit to Accounts Receivable and a credit to Allowance for Doubtful Accounts.
B)debit to Uncollectible Accounts Expense and a credit to Allowance for Doubtful Accounts.
C)debit to Uncollectible Accounts Expense and a credit to Accounts Receivable.
D)debit to Allowance for Doubtful Accounts and a credit to Accounts Receivable.

Question

Quizplus · Accepted Answer

The correct adjusting entry for recording estimated losses from uncollectible accounts involves debiting Uncollectible Accounts Expense (or Bad Debt Expense) to recognize the expense in the income statement and crediting Allowance for Doubtful Accounts to increase the contra asset account that reduces the balance of Accounts Receivable on the balance sheet. This method follows the allowance method of accounting for bad debts.

The Adjusting Entry to Record Estimated Losses from Uncollectible Accounts