Under the allowance method,when a year-end adjustment is made for estimated uncollectible accounts,

Question

Quizplus · Accepted Answer

When a year-end adjustment is made for estimated uncollectible accounts under the allowance method, the bad debt expense is increased and the allowance for doubtful accounts is also increased. This results in a decrease in the total assets since accounts receivable (an asset account) is decreased by the amount of estimated uncollectible accounts. The expenses increase reflecting the bad debt expense, and the net income decreases as a result.

Under the Allowance Method,when a Year-End Adjustment Is Made for Estimated