An Aging of a Company's Accounts Receivable Indicates That $4,500

question 53

Multiple Choice

An aging of a company's accounts receivable indicates that $4,500 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $1,200 debit balance, the adjustment to record bad debts for the period will require a

• A) debit to Bad Debt Expense for $4,500.
• B) debit to Allowance for Doubtful Accounts for $5,700.
• C) debit to Bad Debt Expense for $5,700.
• D) credit to Allowance for Doubtful Accounts for $4,500.

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Definitions:

Creditor's Debt

An obligation owed by a debtor to a creditor, typically involving the repayment of borrowed money with interest.

Automatically Perfected

A status achieved by security interests in certain types of property upon attachment, without further legal action or filing required.

Financing Statement

A document filed by a creditor to give public notice that it has or may have an interest in the personal property of a debtor (usually in connection with a secured transaction).

Consumer Good

A commodity or a product that is produced and purchased to satisfy the personal needs or wants of the consumer.