Assume the following unadjusted account balances at the end of the accounting period: Accounts Receivable, $15,000; Allowances for Uncollectible Accounts, $400 (debit balance); Net sales, $100,000. If the company’s past experience indicates credit losses of 2% of net sales, the adjusting entry to estimate uncollectible accounts is:
Answer
A.
Bad Debts Expense
2,000
Allowance for Uncollectible Accounts
2,000
B.
Bad Debts Expense
2,400
Allowance for Uncollectible Accounts
2,400
C.
Bad Debts Expense
1,600
Allowance for Uncollectible Accounts
1,600
D.
Bad Debts Expense
2,000
Accounts Receivable
2,000
E. None of the above