Tanning Company analyzes its receivables to estimate uncollectible accounts. The accounts receivable balance is $374,000 and credit sales are accounts receivable estimates that $11,220 of the outstanding receivables will be uncollectible. What adjusting entry will Tanning Company make if Allowance for Doubtful Accounts has a credit balance of $1,800 before adjustment? Bad Debt Expense Bad Debt Expense Oc Allowance for Doubtful Accounts - 04 Allowance for Doubtful Accounts Bad Debt Expense Allowance for Doubtful Accounts Bad Debt Expense Allowance for Doubtful Accounts 9,420 11,220 39,060 13,020 9,420 11,220 39,060 13,020

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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.