Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 8 - No. 7)
If a company estimates that $5,000 of its accounts receivable will be uncollectible, how is the bad debt expense recorded in journal entries?
Debit Bad Debt Expense, Credit Allowance for Doubtful Accounts.
Credit Bad Debt Expense, Debit Allowance for Doubtful Accounts.
Debit Allowance for Doubtful Accounts, Credit Bad Debt Expense.
Credit Accounts Receivable, Debit Bad Debt Expense.
Explanation
Bad debt expense is debited, and the allowance for doubtful accounts is credited.
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