The Unadjusted Balance In Allowance For Doubtful Accounts
The u nadjusted balance in Allowance for Doubtful Accounts / Provision for Doubtful Debts of previous accounting period need to be adjusted in the current accounting period when we make credit sales and make an estimation of uncollectible accounts due on the basis of percentage of sales ( Income Statement-Apprach ) or percentage of closing balance of Accounts Receivable / Debtors ( B alance Sheet-Approach ). Here, we adjust the unadjusted balance of allowance for doubtful accounts with the help of an example. Suppose the unadjusted credit balance of allowance for doubtful accounts is Rs. 500 in the previous accounting period which is brought down to the current accounting period. Estimated Uncollectible Accounts Expense on Accounts Receivable ( B ased on Accounts Receivable Aging Report or B alance Sheet-Approach) is Rs. 900. Then what is the adjusted balance of allowance for doubtful accounts at 31 st December of the current accounting period. ...