A company has $90,000 in outstanding accounts receivable and it uses the allowance method to account for uncollectible accounts. Experience suggests that 4% of outstanding receivables are uncollectible. The journal entry to record the estimated amount uncollectible includes a debit to Bad Debt Expense and credit to Allowance for Bad Debt account for $3,600.

Group of answer choices

True

False

Question 2

The general ledger account "Allowance for Doubtful Accounts", also known as "Allowance for Bad Debt", is designated as a liability account.

Group of answer choices

True

False