To provide for the possibility that a portion of a hotel's accounts receivable ledger may prove to be uncollectible, periodically, the following entry should be entered in the hotel's accounts.

Question

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The correct entry to account for the possibility that some accounts receivable may not be collected is to debit Bad Debts Expense and credit Allowance for Doubtful Accounts. This entry recognizes the expense associated with potential bad debts and increases the allowance for doubtful accounts, which is a contra-asset account that reduces the total accounts receivable balance on the balance sheet to reflect a more accurate collectible amount.

To Provide for the Possibility That a Portion of a Hotel's