Allowance for Doubtful Accounts has an unadjusted balance of $800 at the end of the year, and an analysis of accounts in the customers' ledger indicates doubtful accounts of $15,000.Which of the following records the proper provision for doubtful accounts?
A) Increase Uncollectible Accounts Expense, $800; increase Allowance for Doubtful Accounts, $800
B) Increase Uncollectible Accounts Expense $15,000; increase Allowance for Doubtful Accounts, $15,000
C) Increase Uncollectible Accounts Expense, $14,200; increase Allowance for Doubtful Accounts, $14,200
D) Increase Uncollectible Accounts Expense, $15,800; increase Allowance for Doubtful Accounts, $15,800

Question

Quizplus · Accepted Answer

The unadjusted balance of $800 in the Allowance for Doubtful Accounts is already included in the $15,000 analysis of doubtful accounts. Therefore, the necessary adjustment is the difference between the total doubtful accounts of $15,000 and the unadjusted balance of $800, which is $14,200. This amount should be recorded as an increase in both the Uncollectible Accounts Expense and the Allowance for Doubtful Accounts. Option C records this adjustment correctly.

Allowance for Doubtful Accounts Has an Unadjusted Balance of $800