To record estimated uncollectible accounts using the allowance method the adjusting entry would be a
A) debit to Accounts Receivable and a credit to Allowance for Doubtful Accounts.
B) debit to Bad Debt Expense and a credit to Allowance for Doubtful Accounts.
C) debit to Allowance for Doubtful Accounts and a credit to Accounts Receivable.
D) debit to Loss on Credit Sales Revenue and a credit to Accounts Receivable.

Question

Quizplus · Accepted Answer

The allowance method requires the use of the Bad Debt Expense account. To record estimated uncollectible accounts, Bad Debt Expense is debited and Allowance for Doubtful Accounts is credited. This is because the allowance account is a contra asset account, which is used to reduce the balance of the Accounts Receivable account to its estimated realizable value (the amount the company expects to collect).

To Record Estimated Uncollectible Accounts Using the Allowance Method the Adjusting