An aging of a company's accounts receivable indicates that $10,000 is estimated to be uncollectible. If Allowance for Doubtful Accounts has a $1,500 balance, the adjustment to record bad debt expense for the period will require a(an):

Question

Quizplus · Accepted Answer

The correct adjustment is to increase Bad Debt Expense by the difference between the estimated uncollectible amount ($10,000) and the existing balance in the Allowance for Doubtful Accounts ($1,500), which is $8,500. This ensures the allowance account reflects the updated estimate of uncollectible accounts.

An Aging of a Company's Accounts Receivable Indicates That $10,000