A Company Has $90,000 in Outstanding Accounts Receivable and It

Multiple Choice

A company has $90,000 in outstanding accounts receivable and it uses the allowance method to account for uncollectible accounts. Experience suggests that 6% of outstanding receivables are uncollectible. The current debit balance (before adjustments) in the allowance for doubtful accounts is $800. The journal entry to record the adjustment to the allowance account includes a debit to Bad Debts Expense for:

A) $4,600
B) $5,400
C) $6,200
D) $6,800
E) None of these