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allowance for doubtful accounts has an unadjusted balance of $500 at the end of the year, and an analysis of accounts in the customers' ledger indicates doubtful accounts of $15,000. compute the adjusted balance in the allowance for doubtful accounts?



Answer :

In order to compute the adjusted balance in the allowance for doubtful account :

1. Increase Uncollectible Accounts Expense, 14,500

2. Increase Allowance for Doubtful Accounts 14,500

Accounts receivable are linked to a contra-asset account called the allowance for questionable accounts, which is used to reflect the actual worth of those accounts. The sum is the projected value of accounts receivable that a business doesn't anticipate being paid for

With an offset to bad debt charge, the allowance is created in the same financial year as the initial transaction. The two most popular methods for estimating uncollectible accounts are the percentage of sales technique and the accounts receivable aging method.

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