An aging of a company's accounts receivable indicates that $6000 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $800 credit balance the adjustment to record bad debts for the period will require a
A) debit to Bad Debt Expense for $6000.
B) debit to Allowance for Doubtful Accounts for $5200.
C) debit to Bad Debt Expense for $5200.
D) credit to Allowance for Doubtful Accounts for $6000.

Question

Quizplus · Accepted Answer

The aging of accounts receivable indicates that $6000 are estimated to be uncollectible. Since there is already a credit balance of $800 in the Allowance for Doubtful Accounts, only the remaining $5200 ($6000 - $800) needs to be recorded as Bad Debt Expense. Therefore, the adjustment would require a debit to Bad Debt Expense for $5200.

An Aging of a Company's Accounts Receivable Indicates That $6000