At the end of a period (before adjustment), Allowance for Doubtful Accounts has a credit balance of $250. The credit sales for the period total $500,000. If the company estimates uncollectible accounts at 1% of credit sales, the amount of bad debt expense to be recorded in an adjusting entry is $4,750.

Question

Quizplus · Accepted Answer

Bad Debt Expense = Credit Sales × Bad Debt as a Percent of Credit Sales = $500,000 × 0.01 = $5,000

At the End of a Period (Before Adjustment), Allowance for Doubtful