Question

At the end of March, the unadjusted trial balance of Tutor, Inc. included the following accounts:

Tutor uses the balance sheet approach in estimating uncollectible accounts expense, and aging the accounts receivable indicates the estimated uncollectible portion to be $8,600. What is the amount of uncollectible accounts expense recognized in Tutor's income statement for March?
A. $8,600
B. $6,800
C. $10,400
D. $1,800

Answer 1

A. $8,600

Step-by-step explanation:

the journal entry to record uncollectible accounts expense is:

March 31, 202x, bad debt expense

Dr Bad debt expense 8,600

Cr Allowance for uncollectible accounts 8,600

Allowance for uncollectible accounts is a contra asset asset that decreases the net balance of accounts receivable. While bad debt expense is a temporary account that is included under operating expenses in the income statement.