An aging of a company's accounts receivable indicates that $9000 is estimated to be uncollectible.If Allowance for Doubtful Accounts has a $3200 balance the adjustment to record bad debts for the period will require a
A)increase to Bad Debt Expense for $9000.
B)decrease to Allowance for Doubtful Accounts for $5800.
C)increase to Bad Debt Expense for $5800.
D)increase to Allowance for Doubtful Accounts for $9000.

Question

Quizplus · Accepted Answer

The aging of accounts receivable indicates that $9000 is estimated to be uncollectible, thus this amount needs to be recorded as an expense in the period. However, the company already has a $3200 balance in the Allowance for Doubtful Accounts, which means that only an additional $5800 needs to be recorded as Bad Debt Expense. Therefore, the adjustment will require an increase to Bad Debt Expense for $5800.

An Aging of a Company's Accounts Receivable Indicates That $9000