Question

New Microsoft Word Document Review View Help Search 1 Aabend AaBbcd AaBb 1 Normal | No Spac, Heading 1 AaBbce AaB AalbCD AaBbcDd Abcd Ad Heading Title Subtitle Subtle Em Emphasis Paragraph Styles Allowance for Doubtful Accounts has a credit balance of $956 at the end of the year (before adjustment), and an analysis of customers' accounts indicates uncollectible receivables of $11,408. Which of the following entries records the proper adjustment for Bad Debt Expense? Select the correct answer debit Bad Debt Expense, $12,364; credit Allowance for Doubtful Accounts, $12,364 debit Allowance for Doubtful Accounts, $10,452; credit Bed Debt Expense, $10,452 debit Bad Debt Expense, $10,452; credit Allowance for Doubtful Accounts, $10,452 debit Allowance for Doubtful Accounts, $12,364; credit Bad Debt Expense, $12,364 (Cr)

Answer 1

Answer

• Adjusted balance required in Allowance account = $ 11408 Credit which is estimated uncollectible.
• Unadjusted balance in Allowance account = $ 956 Credit.
• Bad Debt Expense = $ 11408 credit balance required - $ 956 credit balance already existing
  = $ 10,452
• Correct Answer = Option #3
  Debit Bad Debt Expense $ 10,452
  Credit Allowance for Doubtful Accounts = $ 10,452