When the allowance method is used to account for uncollectible accounts, Bad Debts Expense is debited when A. a customer's account becomes past due. B. an account becomes bad and is written off. C. a sale is made. D. management estimates the amount of uncollectibles

Question

Cynthia Chung

Business

2 January, 07:15

When the allowance method is used to account for uncollectible accounts, Bad Debts Expense is debited when A. a customer's account becomes past due. B. an account becomes bad and is written off. C. a sale is made. D. management estimates the amount of uncollectibles

+1

Answers (1)

Know the Answer?

Gerardo Kane · Answer 1

Option D. management estimates the amount of uncollectibles

Explanation:

When the company estimates the bad debts, reflects it in the balance sheet through a Debit entry in the Bad Debt Expenses againts the asset account Allowance for Doubtful Accounts as a Credit.

When the bad debt are confirm as uncollectible the loss is reflected in the Account Receivable as a Credit with the correspondent debit entry in the Allowance for Doubtful Accounts.