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A company has $90,000 in outstanding accounts receivable and it uses the allowance method to account for uncollectible accounts. Experience suggests that 6% of outstanding receivables are uncollectible. The current debit balance (before adjustments) in the allowance for doubtful accounts is $800. The journal entry to record the adjustment to the allowance account includes a debit to Bad Debts Expense for:

a. $4,600

b. $5,400

c. $6,200

d. $6,800

e. None of these

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9797825

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