Question
6. Allowance for Bad Debts has a credit balance of $9,000 at the end of the year (before adjustment), and an analysis using percent of
6. Allowance for Bad Debts has a credit balance of $9,000 at the end of the year (before
adjustment), and an analysis using "percent of sales" indicates an estimated $49,000 bad debts. Which of the following entries would correctly record the adjustment to the allowance for bad debts?
a. debit Bad Debts Expense, $58,000; credit Allowance for BadDebts, $58,000
b. debit Bad Debts Expense, $49,000; credit Allowance for Bad Debts, $49,000
c. debit Allowance for Bad Debts, $49,000; credit Bad Debt Expense, $49,000
d. debit Allowance for Bad Debts, $58,000; credit Bad Debt Expense, $58,000
the correct answer is B but im having a hard time understanding why?
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Managerial Accounting For Dummies
Authors: Mark P Holtzman, Karen Schoenebeck
1st Edition
1118116429, 978-1118116425
