Ask Question
22 May, 07:36

An aging of a company's accounts receivable indicates that $4,000 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $1,200 credit balance, the adjustment to record bad debts for the period will require aa. debit to Bad Debts Expense for $4,000. b. debit to Allowance for Doubtful Accounts for $2,800. c. debit to Bad Debts Expense for $2,800. d. credit to Allowance for Doubtful Accounts for $4,000.

+3
Answers (2)
  1. 22 May, 07:50
    0
    debit to Bad Debts Expense for $2,800

    Explanation:

    The adjustment to record bad debts for the period will require a debit to Bad Debts Expense for $2800.

    i. e. $ (4000 - 1200) = $2800
  2. 22 May, 07:58
    0
    The correct answer is letter "C": debit to Bad Debts Expense for $2,800.

    Explanation:

    Bad Debt Expenses are debts a company incurs when it sells goods or services but receives no payment or partial payments. These investments are part of conducting business on credit and occur for several reasons that include fraud, trade disagreements or a company simply avoiding the obligation to pay.

    In the example, the adjustment to bad debts expense will be the result of accounts receivable minus doubtful accounts. Then:

    Bad Debt Expenses = $4000 - $1200 = $2800
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “An aging of a company's accounts receivable indicates that $4,000 are estimated to be uncollectible. If Allowance for Doubtful Accounts has ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers