Allowance for Doubtful Accounts has a credit balance of $1,300 at the end of the year (before adjustment). The company prepares an analysis of customers' accounts to estimate the amount of uncollectible accounts of $41,900. Which of the following adjusting entries would be made to record the Bad Debt Expense for the year? A. debit Allowance for Doubtful Accounts, $40,600credit Bad Debt Expense, $40,600B. debit Allowance for Doubtful Accounts $43,200 credit Bad Debt Expense, $43,200C. debit Bad Debt Expense, $43,200 credit Allowance for Doubtful Accounts, $43,200D. debit Bad Debt Expense, $40,600 credit Allowance for Doubtful Accounts, $40,600

Question

Janelle

Business

2 July, 08:09

Allowance for Doubtful Accounts has a credit balance of $1,300 at the end of the year (before adjustment). The company prepares an analysis of customers' accounts to estimate the amount of uncollectible accounts of $41,900. Which of the following adjusting entries would be made to record the Bad Debt Expense for the year? A. debit Allowance for Doubtful Accounts, $40,600credit Bad Debt Expense, $40,600B. debit Allowance for Doubtful Accounts $43,200 credit Bad Debt Expense, $43,200C. debit Bad Debt Expense, $43,200 credit Allowance for Doubtful Accounts, $43,200D. debit Bad Debt Expense, $40,600 credit Allowance for Doubtful Accounts, $40,600

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Khalil Reed · Answer 1

D

Explanation:

Allowance for bad debt reduces the AR balance on the balance sheet, so will always be a credit balance. As the existing balance is $1,300 and the final balance needs to be $41,900, an adjusting entry of $40,600 is required on the credit side of the balance sheet.