Question

Branz Company uses an aging method to account for uncollectible accounts. The aging revealed the need for a $22,000 account balance at the end of the period. The beginning-of-period balance was $10,000 and $9,000 in accounts were actually written off during the period. Which of these reflects the correct journal entry to update the allowance account based on the aging analysis?

a.Accounts Receivable 21,000
Allow. for Uncollectible Accts 21,000
b.Uncollectible Accts Expense 21,000
Accounts Receivable 21,000
c.Uncollectible Accts Expense 21,000
Allow. for Uncollectible Accts 21,000
d.Allow. for Uncollectible Accts 21,000
Accounts Receivable 21,000

Answer 1

The correct journal entry to update the allowance account based on the aging analysis is option d) Allow. for Uncollectible Accts 21,000 and Accounts Receivable 21,000.

Step-by-step explanation:

The correct journal entry to update the allowance account based on the aging analysis is option d) Allow. for Uncollectible Accts 21,000 and Accounts Receivable 21,000.

When using the aging method, the journal entry to update the allowance account is a debit to the Allow. for Uncollectible Accts and a credit to Accounts Receivable for the amount needed based on the aging analysis, in this case $22,000.

Therefore, the correct journal entry is:

• Allow. for Uncollectible Accts 21,000 (debit)
• Accounts Receivable 21,000 (credit)