Question

#7

Using the following categories, indicate the effects of the following transactions. Indicate the accounts affected and the amounts. (Enter any decreases to account balances with a minus sign.)

a.	During the period, customer balances are written off in the amount of $10,000.
b.	At the end of the period, bad debt expense is estimated to be $8,000.

Answer 1

Transaction	Accounts affected	[Nature]	Amount by which accounts are affected
a	Allowance for Doubtful Accounts	Contra Current Asset	$        (10,000.00)
	Accounts receivables	Current Asset	$        (10,000.00)
b	Bad Debt Expenses	Expense	$             8,000.00
	Allowance for Doubtful Accounts	Contra Current Asset	$             8,000.00