Prior to adjusting entries, the Allowance for Uncollectible Accounts has a debit balance of $500. The year-end adjustment would include a:

A company creates the following accounts receivable aging report at the end of the year:


Age Amount Estimated Uncollectible

Less than 30 days $ 6,000 5 %

31-60 days $ 4,000 10 %

61+ days $ 2,000 25 %


Prior to adjusting entries, the Allowance for Uncollectible Accounts has a debit balance of $500. The year-end adjustment would include a:


A) Credit to Allowance for Uncollectible Accounts for $1,200.

B) Debit to Bad Debt Expense for $700.

C) Debit to Bad Debt Expense for $1,700.

D) Debit to Bad Debt Expense for $1,200.


Answer: Debit to Bad Debt Expense for $1,700.


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Accounting

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