High School

Record the adjusting entry for uncollectible accounts. Assume the balance of the allowance for uncollectible accounts prior to the adjusting entry is $2,173 (credit).

A) Debit allowance for uncollectible accounts, $2,173; credit bad debts expense, $2,173

B) Debit bad debts expense, $2,173; credit allowance for uncollectible accounts, $2,173

C) Debit cash, $2,173; credit accounts receivable, $2,173

D) Debit accounts receivable, $2,173; credit allowance for uncollectible accounts, $2,173

Answer :

Final answer:

The correct adjusting entry for uncollectible accounts is to debit the allowance for uncollectible accounts and credit bad debts expense.

Explanation:

The correct adjusting entry for uncollectible accounts is option a) Debit allowance for uncollectible accounts, $2,173; credit bad debts expense, $2,173.

When recording the adjusting entry for uncollectible accounts, the allowance for uncollectible accounts is increased with a debit entry, while the bad debts expense is also increased with a credit entry. This allows for a more accurate depiction of the estimated uncollectible accounts.

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