Amaud Company Calculates That This Year's Estimated Bad Debts Expense

Short Answer

Amaud Company calculates that this year's estimated bad debts expense will be $7500.When Amaud makes the adjusting entry the effect will be: $\begin{array}{llll}&\text { Bad Debt }& \text { Allowance for Doubtful Debts } & \text { Gross Accounts }\\&\text { Expense }&&\text { Receivable }\\\text { a. } & \text { No affect } & \text { Increase } & \text { Decrease } \\\text { b. } & \text { No affect } & \text { Decrease } & \text { No affect } \\\text { c. } & \text { Increase } & \text { Increase } & \text { No affect } \\\text { d. } & \text { Increase } & \text { No effect } & \text { Decrease }\end{array}$