At December 31, Gill Co. reported accounts receivable of $311,000. Their allowance for uncollectible accounts had a credit balance of $970 before adjusting entries were made. An analysis of accounts receivable suggests that the allowance for uncollectible accounts should be 2% of accounts receivable. The journal entry to record bad debt expense would be: Debit to Bad Debt Expense of $6,220; credit to Allowance for Uncollectible Accounts of $6,220 O Debit to Allowance for Uncollectible Accounts of $5,250: Credit to Bad Debt Expense of $5,250 O Debit to Bad Debt Expense of $5,250; credit to Allowance for Uncollectible Accounts of $5,250. O Debit to Allowance for Uncollectible Accounts of $6,220; Credit to Bad Debt Expense of $6,220
At December 31, Gill Co. reported accounts receivable of $311,000. Their allowance for uncollectible accounts had a credit balance of $970 before adjusting entries were made. An analysis of accounts receivable suggests that the allowance for uncollectible accounts should be 2% of accounts receivable. The journal entry to record bad debt expense would be: Debit to Bad Debt Expense of $6,220; credit to Allowance for Uncollectible Accounts of $6,220 O Debit to Allowance for Uncollectible Accounts of $5,250: Credit to Bad Debt Expense of $5,250 O Debit to Bad Debt Expense of $5,250; credit to Allowance for Uncollectible Accounts of $5,250. O Debit to Allowance for Uncollectible Accounts of $6,220; Credit to Bad Debt Expense of $6,220
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
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Transcribed Image Text:At December 31, Gill Co. reported accounts receivable of $311,000. Their allowance for uncollectible accounts had a credit
balance of $970 before adjusting entries were made. An analysis of accounts receivable suggests that the allowance for
uncollectible accounts should be 2% of accounts receivable. The journal entry to record bad debt expense would be:
Debit to Bad Debt Expense of $6,220; credit to Allowance for Uncollectible Accounts of $6,220
Debit to Allowance for Uncollectible Accounts of $5,250: Credit to Bad Debt Expense of $5,250
Debit to Bad Debt Expense of $5,250; credit to Allowance for Uncollectible Accounts of $5,250.
Debit to Allowance for Uncollectible Accounts of $6,220; Credit to Bad Debt Expense of $6,220
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