Indy Sport and Hobby's Allowance for Doubtful Accounts had an unadjusted credit balance of $400. The manager estimates that $900 of the Accounts Receivable is uncollectible. Using the balance sheet approach, the year-end adjusting entry for Bad-Debts Expense includes a
Question 3 options:
credit to the Bad-Debt Expense account for $500.
credit to the Bad-Debts Expense account for $1,300.
I can give you a fact that it's not A or B because that would mean a decrease in expenses (Using the Dr. Cr. Rules). But between C and D I would have to go with D. Sorry if I fail your quiz :(
