What is the appropriate account to credit when estimating a portion of health care entity's receivables that will prove to be uncollectible?
A) Bad Debt Expense.
B) Allowance for Uncollectible Accounts.
C) Patient Service Revenues.
D) Accounts Receivable.
E) Contractual Adjustments.

Question

Quizplus · Accepted Answer

The appropriate account to credit when estimating a portion of health care entity's receivables that will prove to be uncollectible is the Allowance for Uncollectible Accounts. This account is used to estimate the portion of the receivables that are unlikely to be collected and is credited to decrease the balance of the Accounts Receivable. Bad Debt Expense is also related to uncollectible accounts, but it is the expense account used to record the cost of the uncollectible portion of the receivables, which is debited to increase the allowance. Patient Service Revenues and Contractual Adjustments are not relevant to this situation.

What Is the Appropriate Account to Credit When Estimating a Portion