Type the correct answer in the box. Spell all words correctly. Adidea Corp. estimates that $5,670 of its accounts receivables are uncollectible. How will the company record the transaction?

The company will record the uncollectible $5,670 of its accounts receivable as a debit to uncollectible accounts expense and a credit to the account.

Doubtful

Explanation:

The company will record the uncollectible $5,670 of its accounts receivable as a debit to uncollectible accounts expense and a credit to the DOUBTFUL account.

This is evident in the fact that the bad debt allowance method has three main principles which are:

1. Calculate uncollectible receivables

2. Debit bad debt expense and credit allowance for doubtful accounts in the journal entry

3. Debit allowance for doubtful accounts and credit the corresponding receivables account when it is time to write off the account.

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