Amaad Company calculated that this year's estimated bad debts expense will be $7500. When the necessary adjusting entry is made what effect will it have on the following accounts? Bad debts expense: allowance for doubtful debts: gross accounts receivable.

Question

Quizplus · Accepted Answer

The adjusting entry for bad debts expense increases the Bad Debts Expense account and also increases the Allowance for Doubtful Debts account, but it has no effect on the Gross Accounts Receivable.

Amaad Company Calculated That This Year's Estimated Bad Debts Expense