Question

On December 31, DVS Company estimates that $2,500 of its accounts receivable balance is uncollectible. DVS uses the allowance method to account for bad debts. The entry to record this adjusting entry would include a: (Check all that apply.) debit to Bad Debts Expense for $2,500. credit to Allowance for Doubtful Accounts for $2,500. credit to Accounts Receivable for $2,500. debit to Allowance for Doubtful Accounts for $2,500.

Answer 1

debit to Bad Debts Expense for $2,500. credit to Allowance for Doubtful Accounts for $2,500

Step-by-step explanation:

The adjusting entry is shown below:

Bad debt expense $2,500

To Allowance for Doubtful Accounts $2,500

(Being the bad debt expense is recorded)

For recording this adjusting entry we debited the bad debt expense as it increased the expense and credited the allowance for doubtful accounts as it decreased the assets