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Estimating and Recording Uncollectible Accounts Expense: A Guide

This lesson covers the process of estimating and recording uncollectible accounts expense in financial statements. By applying the sales on account multiplied by the estimated percentage of uncollectible accounts, businesses can forecast their potential losses. For example, a total sales on account of $1,287,330.00 at a 1.0% uncollectible estimate results in an expense of $12,873.30. It also provides guidance on analyzing and journalizing adjustments, entering credit and debit amounts, and posting the adjusting entry for uncollectible accounts expense.

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Estimating and Recording Uncollectible Accounts Expense: A Guide

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  1. LESSON 17-1 Uncollectible Accounts

  2. Total Saleson Account × Percentage = EstimatedUncollectibleAccounts Expense ESTIMATING AND RECORDING UNCOLLECTIBLE ACCOUNTS EXPENSE page 515 $1,287,330.00 × 1.0% = $12,873.30 LESSON 17-1

  3. 3 3 ANALYZING AND JOURNALIZING AN ADJUSTMENT FOR UNCOLLECTIBLE ACCOUNTS EXPENSE page 516 1 2 1. Enter and label credit amount. 2. Enter and label debit amount. 3. Record adjusting entry. LESSON 17-1

  4. 1 2 POSTING AN ADJUSTING ENTRY FOR UNCOLLECTIBLE ACCOUNTS EXPENSE page 517 1. Debit 2. Credit LESSON 17-1

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