A accounting question: prepare the adjusting entry at december 31, 2008, for bad debts expense under each of t

Question

he following assumptions. (1) an aging schedule indicates that $11,750 of accounts receivable will be uncollectible. (2) the company estimates that 1% of sales will be uncollectible.

so would it be labeled like this:

dec 31: bad debts expense

allowance for doubtful accounts

(to adjust allowance account on total estimated uncollectibles)

Answer 1

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Answer 2

You are correct, but some text books recommend the term Doubtful debts expense because the debts are merely doubtful, not bad. If ascertained to be bad, they should be written off.