Final answer:
An overstatement of Bad Debt Expense in a particular year is typically corrected by decreasing Bad Debt Expense and decreasing the corresponding allowance for doubtful accounts.
Step-by-step explanation:
When Bad Debt Expense is overstated in a particular year, it means that the company has recorded a higher amount of bad debt expense than necessary.
This can happen due to errors in estimating the amount of bad debt or mistakenly recording non-collectible accounts as bad debt. To correct this overstatement, the company needs to make an adjusting entry by decreasing Bad Debt Expense and decreasing the corresponding allowance for doubtful accounts.