The Year-End Adjusting Entry To Recognized Estimated Uncollectible Accounts Will: | MCQ Question Answer

The correct answer is (B), as at the year-end, the following Adjusting Entry to recognized Estimated Uncollectible Accounts is recorded as shown below:

      Uncollectible Accounts Expense a/c  XXX

                                        Allowance For Doubtful Accounts a/c  XXX

     (Allowance For Doubtful Accounts Are Adjusted At The End)

Here Uncollectible Accounts Expense is an estimated expense account which decreases equity on balance sheet as expenses affects equity account negatively and Allowance For Doubtful Accounts Account is a Contra Asset Account which decreases Accounts Receivable (Current Asset) on balance sheet as it is deducted from accounts receivable to calculate net realizable value of accounts receivable / sundry debtor. So, the correct answer of this MCQ is (B). The other choices of this multiple choice question are incorrect.