Scott Co.reported an allowance for doubtful accounts of $28,000 (credit)at December 31,2013,before performing an aging of accounts receivable.As a result of the aging,Scott determined that an estimated $27,000 of the December 31,2013,accounts receivable would prove uncollectible.The adjusting entry required at December 31,2013,would be
A) Doubtful Accounts Expense ...........27,000
Allowance for Doubtful Accounts ...27,000
B) Doubtful Accounts Expense ...........27,000
Accounts Receivable ...............27,000
C) Allowance for Doubtful Accounts .....1,000
Doubtful Accounts Expense .........1,000
D) Doubtful Accounts Expense ...........1,000
Allowance for Doubtful Accounts ...1,000

Question

Quizplus · Accepted Answer

The correct adjusting entry is to increase the Allowance for Doubtful Accounts to the newly estimated amount, which requires an additional $1,000 (27,000 - 28,000 = -1,000, but since it's an increase, we ignore the negative sign).

Scott CoReported an Allowance for Doubtful Accounts of $28,000 (Credit)at December