An Aging of a Company's Accounts Receivable Indicates That $7,000

question 132

Multiple Choice

An aging of a company's accounts receivable indicates that $7,000 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $1,100 credit balance, the adjustment to record bad debts for the period will require a

• A) debit to Bad Debt Expense for $7,000.
• B) debit to Allowance for Doubtful Accounts for $5,900.
• C) debit to Bad Debt Expense for $5,900.
• D) credit to Allowance for Doubtful Accounts for $7,000.

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Definitions:

Market Value

The present-day selling or buying price of an asset or service in a market.

Note Payable

A financial obligation or loan documented by a written promissory note specifying the principal amount, interest rate, and maturity date.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded for an asset over its life, effectively reducing its book value.

Accounts Receivable

Amounts due to a company from its customers for goods or services delivered on credit.