When estimating uncollectible receivables based on the percentage-of-sales method, the adjusting entry will include a credit to Accounts Receivable.

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The adjusting entry will include a debit to Bad Debt Expense, not a credit to Accounts Receivable. This is because the adjusting entry reflects an expense account (Bad Debt Expense) that needs to be increased to reflect the estimated uncollectible receivables.

When Estimating Uncollectible Receivables Based on the Percentage-Of-Sales Method, the Adjusting