The two accounts used to adjust the uncollectible accounts are.
A) Uncollectible Accounts Expense and Allowance for Uncollectible Accounts.
B) Accounts Receivable and Uncollectible Accounts Expense.
C)Accounts Receivable and Allowance for Uncollectible Accounts
D)Accounts Receivable and Accounts Receivable Expense.
answer is B?
To determine which accounts are used to adjust the uncollectible accounts, we need to understand the concept of allowance for uncollectible accounts and uncollectible accounts expense.
Uncollectible accounts are accounts receivable that a company believes will not be paid by their customers. To account for these potential losses, companies create an allowance for uncollectible accounts. This allowance is a contra-asset account that reduces the total amount of accounts receivable on the balance sheet.
Uncollectible accounts expense is an income statement account that represents the estimated amount of accounts receivable that will not be collected.
Based on this understanding, we can evaluate the options:
A) Uncollectible Accounts Expense and Allowance for Uncollectible Accounts: This option correctly identifies the accounts used for adjusting uncollectible accounts.
B) Accounts Receivable and Uncollectible Accounts Expense: This option is incorrect. Accounts receivable is the initial account where the uncollectible accounts are recorded, but it is not involved in the adjusting process. Uncollectible accounts expense is the correct account, but the second account should be allowance for uncollectible accounts, not accounts receivable.
C) Accounts Receivable and Allowance for Uncollectible Accounts: This option is correct. The uncollectible accounts are adjusted by reducing the accounts receivable balance and increasing the allowance for uncollectible accounts balance.
D) Accounts Receivable and Accounts Receivable Expense: This option is incorrect. There is no such account as accounts receivable expense.
Therefore, the correct answer is C) Accounts Receivable and Allowance for Uncollectible Accounts.