Which of the following results from recording bad debts expense under the allowance method?
A) A decrease in Bad Debts Expense
B) An increase in Allowance for Doubtful Accounts
C) An increase in Revenue
D) A decrease in Uncollectible Accounts

Question

Quizplus · Accepted Answer

Recording bad debts expense under the allowance method results in an increase in the allowance for doubtful accounts. This is because the allowance account represents the estimated amount of accounts receivable that are unlikely to be collected. When bad debts expense is recorded, the allowance account is increased to match the estimated amount of uncollectible accounts.

Which of the Following Results from Recording Bad Debts Expense