The journal entry to record the estimate of uncollectible accounts includes a:
A) debit Bad Debts Expense; credit Allowance for Doubtful Accounts.
B) debit Bad Debts Expense; credit Accounts Receivable.
C) debit Allowance for Doubtful Accounts; credit Bad Debts Expense.
D) debit Sales; credit Bad Debts Expense.

Question

Quizplus · Accepted Answer

The correct journal entry to record the estimate of uncollectible accounts involves debiting Bad Debts Expense and crediting Allowance for Doubtful Accounts. This entry recognizes the estimated amount of accounts receivable that may not be collected in the future, without directly writing off specific accounts at this point.

The Journal Entry to Record the Estimate of Uncollectible Accounts