Allowance for Doubtful Accounts Has a Debit Balance of $980

question 70

Multiple Choice

Allowance for doubtful accounts has a debit balance of $980 at the end of the current year (prior to adjustment) . Net credit sales for the current period amount to $900,000 and 2.5% is estimated to be uncollectible. The adjusting entry would require a credit to:

• A)bad-debt expense for $23,480.
• B)allowance for doubtful accounts for $21,520.
• C)allowance for doubtful accounts for $22,500.
• D)accounts receivable accounts for $22,500.

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