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A company has $97,000 in outstanding accounts receivable and it uses the allowance method to...

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Accounting

A company has $97,000 in outstanding accounts receivable and it uses the allowance method to account for uncollectible accounts. Experience suggests that 4% of outstanding receivables are uncollectible. The current balance (before adjustments) in the allowance for doubtful accounts is a(n) $870 credit. The journal entry to record the adjustment to the allowance account includes a debit to Bad Debts Expense for:

Multiple Choice

  • $3,010

  • $3,845
  • $3,915

  • $3,880

  • $4,750

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