On December 31,prior to adjustment,Allowance for Doubtful Accounts has a debit balance of $400.An aging of the accounts receivable produces an estimate of $2,600 of probable losses from uncollectible accounts.The adjusting entry needed to record the estimated losses from uncollectible accounts is made for
A) $2,200.
B) $2,600.
C) $3,000.
D) $400.

Question

Quizplus · Accepted Answer

The Allowance for Doubtful Accounts needs to have a credit balance of $2,600 after adjustment. Since it currently has a debit balance of $400, the adjusting entry should be for $3,000 to bring the balance to the required $2,600 credit.

On December 31,prior to Adjustment,Allowance for Doubtful Accounts Has a Debit