To record estimated uncollectible receivables using the allowance method, the adjusting entry would be a a. debit to loss on credit sales and a credit to accounts receivable b. debit to accounts receivable and a credit to allowance for doubtful accounts c. debit to allowance for doubtful accounts and a credit to accounts receivable d. debit to bad debt expense and a credit to allowance for doubtful accounts

The correct answer to this question is C) the adjustment entry would be debit to allowance for doubtful account and credit to account receivables.

Explanation:

Under the given allowance method, if a company or sole proprietor identifies a customer's receivables account as un collectible, than that amount ( un collectible ) would be deducted from the accounts receivables. Now by making the deduction from the account receivables would only have the effect on balance sheet not the income statement because for such losses an adjustment entry of bad debt expense has been made in income statement. The adjustment entry for uncollectibe receivables would be debit to allowance for account receivables and credit to account receivables.

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