Question

Under the allowance method, the journal entry to recognize uncollectible accounts expense is made ______?

Answer 1

The journal entry to recognize uncollectible accounts expense is debiting the Bad Debt Expense account and crediting the Allowance for Doubtful Accounts account.

Step-by-step explanation:

The journal entry to recognize uncollectible accounts expense under the allowance method is made by debiting the Bad Debt Expense account and crediting the Allowance for Doubtful Accounts account.

This journal entry is made at the end of the accounting period based on an estimate of the uncollectible accounts receivable.

For example, if a company estimates that $5,000 of its accounts receivable will be uncollectible, the journal entry would be:

• Debit Bad Debt Expense $5,000
• Credit Allowance for Doubtful Accounts $5,000