A company ages its accounts receivables to determine its end of period adjustmen

Question

A company ages its accounts receivables to determine its end of period adjustment for bad debts. At the end of the current year, management estimated that $21,000 of the accounts receivable balance would be uncollectible. Prior to any year-end adjustments, the Allowance for Doubtful Accounts had a debit balance of $550. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?

Explanation / Answer

Total Amount required in allowance account = 21000 credit

There is a debit balance in allowance account = - 550

so total expense to be charged = 21000 +550 = 21550 credit

Entry :

Bad debt expense   debit 21550

Allownace for doubtful account credit 21550

correct option is "C"

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.