Using the Income Statement Approach for Accounting for Uncollectible Accounts,a

Multiple Choice

Using the income statement approach for accounting for uncollectible accounts,a company estimates that 2.5% of credit sales will eventually become uncollectible.If credit sales during the year are $400,000 and accounts receivable at the end of the year are $80,000,the adjustment for estimated uncollectible accounts will require a:

A) Credit to Accounts Receivable for $2,000.
B) Debit to Bad Debt Expense for $10,000.
C) Debit to Allowance for Uncollectible Accounts for $10,000.