An Aging of a Company's Accounts Receivable Indicates That $11,000

question 38

Multiple Choice

An aging of a company's accounts receivable indicates that $11,000 is estimated to be uncollectible.If the Allowance for Doubtful Accounts has a $1,600 debit balance, the adjustment to record bad debts for the period will require a

• A)debit to Bad Debts Expense for $12,600.
• B)debit to Bad Debts Expense for $11,000.
• C)debit to Bad Debts Expense for $9,400.
• D)debit to Allowance for Doubtful Accounts for $11,000.

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Definitions:

Accounts Payable Period

The average amount of time it takes for a business to pay its invoices from suppliers and vendors, typically measured in days.

Cash Expenses

Outflows of cash within a certain period for operational activities, excluding non-cash expenses like depreciation.

Projected Sales

Estimates of the amount of revenue that a company expects to earn in the future.

Credit Sales

Credit sales refer to a transaction wherein the payment for the goods or services provided is made at a later date.