The allowance method of estimating uncollectible accounts receivable based on an analysis of receivables shows that $640 of accounts receivables are uncollectible.The Allowance for Doubtful Accounts has a debit balance of $110.The adjusting entry at the end of the year will include a credit to Allowance for Doubtful Accounts in the amount of:
A)$110
B)$640
C)$530
D)$750

Question

Quizplus · Accepted Answer

The adjusting entry should bring the Allowance for Doubtful Accounts to the desired balance of $640. Since it currently has a debit balance of $110, you need to credit it by $750 to offset the debit and reach the $640 balance.

The Allowance Method of Estimating Uncollectible Accounts Receivable Based on an Analysis