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Question
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:
A) includes a credit to the Bad Debt Expense account for $500.
B) includes a debit to the Bad Debts Expense account for $900.
C) includes a credit to the Bad Debts Expense account for $1,300.
D) includes a debit to the Bad Debts Expense account for $500.
Answer
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D) None of the above.
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D) None of the above answers are correct.
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