The adjusting entry for uncollectible accounts requires a debit to
A) Allowance for Doubtful Accounts and a credit to Accounts Receivable.
B) Uncollectible Accounts Expense and a credit to Allowance for Doubtful Accounts.
C) Uncollectible Accounts Expense and a credit to Accounts Receivable.
D) Allowance for Doubtful Accounts and a credit to Uncollectible Accounts Expense.

Question

Quizplus · Accepted Answer

The adjusting entry for uncollectible accounts requires a debit to Uncollectible Accounts Expense and a credit to Allowance for Doubtful Accounts. This is because Uncollectible Accounts Expense represents the estimated amount of accounts receivable that will not be collected, while Allowance for Doubtful Accounts is a contra-asset account that reduces the amount of Accounts Receivable to reflect the estimated amount that will not be collected. By crediting Allowance for Doubtful Accounts, we are increasing the amount of the allowance to match the estimated amount of uncollectible accounts, and by debiting Uncollectible Accounts Expense, we are recognizing the expense associated with those uncollectible accounts.

The Adjusting Entry for Uncollectible Accounts Requires a Debit to