A company performs the aging of accounts receivable calculation and arrives at an estimate for uncollectible accounts of $900.If Allowance for Uncollectible Accounts has a debit balance of $200 prior to the year-end adjustment,for how much should the adjustment be journalized?
A)$200
B)$700
C)$900
D)$1,100

Question

Quizplus · Accepted Answer

The adjustment should be $1,100. This is because the existing debit balance of $200 in the Allowance for Uncollectible Accounts needs to be offset to reach a credit balance of $900, which is the new estimate for uncollectible accounts. The adjustment increases the allowance by $1,100 to achieve the desired credit balance.

A Company Performs the Aging of Accounts Receivable Calculation and Arrives