A company has $97,000 in outstanding accounts receivable and it uses the allowan

Question

A company has $97,000 in outstanding accounts receivable and it uses the allowance method to account for uncollectible accounts. Experience suggests that 3% of outstanding receivables are uncollectible. The current balance (before adjustments) in the allowance for doubtful accounts is an $870 debit. The journal entry to record the adjustment to the allowance account includes a debit to Bad Debts Expense for:

$2,910

$3,780

$870

None of these

A company has $97,000 in outstanding accounts receivable and it uses the allowance method to account for uncollectible accounts. Experience suggests that 3% of outstanding receivables are uncollectible. The current balance (before adjustments) in the allowance for doubtful accounts is an $870 debit. The journal entry to record the adjustment to the allowance account includes a debit to Bad Debts Expense for:

Explanation / Answer

Bad Debts a/c Dr - $3,780

To Allowance for Doubtful Debts a/c Cr - 3,780

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

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