Question

On December 31, Lee Company estimates that $1,000 of its accounts receivable balance is uncollectible. Lee Company uses the allowance method to account for bad debts. The adjusting entry to record this estimate will include a credit to:

Answer 1

Allowance for Doubtful Accounts

Step-by-step explanation:

Answer 2

Allowance for bad debts

Step-by-step explanation:

Allowance method of accounting is used to record estimated bad debts against trade receivables via creating a allowance account. The account is a contra account and is netted off against trade receivables.