The Allowance for Doubtful Accounts Has a Current Debit Balance

question 89

Multiple Choice

The allowance for doubtful accounts has a current debit balance of $2,550. Bad-debt expense is estimated to be 3% of net credit sales. If net credit sales were $250,000, which of the following would be part of the adjusting entry for bad-debt expense?

• A)Debit allowance for doubtful accounts for $7,500.
• B)Credit allowance for doubtful accounts for $4,950.
• C)Debit bad-debt expense for $7,500.
• D)Debit bad-debt expense for $10,050.