Question

Preparing adjusting entry assuming xxx is the estimate of uncollectible receivables from aging schedule.

Answer 1

Preparing adjusting entries for estimating uncollectible receivables from an aging schedule is an important step in accounting.

In accounting, preparing adjusting entries is an important step in the financial reporting process. An adjusting entry for estimating uncollectible receivables from an aging schedule involves recognizing an expense for accounts that are expected to be uncollectible. This adjustment ensures that the financial statements reflect a more accurate picture of the company's financial position. For example, if the aging schedule indicates that $10,000 is estimated to be uncollectible, an adjusting entry would debit the Bad Debt Expense account for $10,000 and credit the Allowance for Doubtful Accounts account for the same amount.

Answer 2

When preparing adjusting entries for estimated uncollectible accounts receivable, use the aging schedule to estimate the amount of receivables that are likely to be uncollectible.

Step-by-step explanation:

When preparing adjusting entries for estimated uncollectible accounts receivable, you need to use the aging schedule to estimate the amount of the receivables that are likely to be uncollectible.

Here is an example illustrating the process:

1. First, you determine the total accounts receivable for the period.
2. Next, you calculate the percentage of accounts receivable that are uncollectible based on the aging schedule. For each category of receivables, you apply a different percentage based on the number of days past due.
3. Then, you multiply the total accounts receivable by the respective uncollectible percentage for each category to determine the estimated uncollectible amount.
4. Finally, you record an adjusting entry to recognize the estimated uncollectible amount as an expense and reduce the accounts receivable balance.