An aging of a company's accounts receivable indicates that $13000 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $1200 credit balance the adjustment to record bad debts for the period will require a
A) debit to Bad Debt Expense for $13000.
B) debit to Allowance for Doubtful Accounts for $11800.
C) debit to Bad Debt Expense for $11800.
D) credit to Allowance for Doubtful Accounts for $13000.

Question

Quizplus · Accepted Answer

The adjustment to record bad debts for the period requires increasing the allowance for doubtful accounts to match the estimated uncollectible accounts. The allowance account already has a $1200 credit balance, so the remaining adjustment needed is $11800 ($13000 - $1200). This adjustment is recorded with a debit to Bad Debt Expense and a credit to Allowance for Doubtful Accounts, so the correct choice is C.

An Aging of a Company's Accounts Receivable Indicates That $13000