An aging-of-accounts-receivable indicates that the amount of uncollectible accounts is $7,200. The Allowance for Uncollectible Accounts prior to adjustment has a credit balance of $2,000. The amount of the adjusting entry should be:

Question

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The adjusting entry should increase the balance in the Allowance for Uncollectible Accounts by the amount of uncollectible accounts, which is $7,200. Since the Allowance for Uncollectible Accounts prior to adjustment has a credit balance of $2,000, the adjusting entry should be for $5,200 ($7,200 - $2,000). Therefore, the correct choice is C).

An Aging-Of-Accounts-Receivable Indicates That the Amount of Uncollectible Accounts Is