This document discusses the allowance method for recording uncollectible accounts. It explains how to estimate uncollectible accounts expense using a percentage of total sales. The document also shows how to analyze and journalize an adjusting entry to record estimated uncollectible accounts expense. Finally, it reviews key terms like uncollectible accounts, allowance method, book value, and book value of accounts receivable.

1. ALLOWANCE METHOD OF RECORDING LOSSES
FROM UNCOLLECTIBLE ACCOUNTS
Uncollectible Accounts Expense
Debit Credit
Accounts Receivable
Debit Credit
Allowance for Uncollectible Accounts
Debit Credit
Lesson 20-1, page 528
© South-Western
Educational Publishing

2. ESTIMATING UNCOLLECTIBLE ACCOUNTS EXPENSE
+ −
÷ ×
Total Sales Estimate Uncollectible
on Account × Percentage = Accounts Expense
$982,800.00 × 1% = $9,828.00
Lesson 20-1, page 529
© South-Western
Educational Publishing

3. ANALYZING AND JOURNALIZING AN ADJUSTMENT
FOR UNCOLLECTIBLE ACCOUNTS EXPENSE
1
2
3 3
1. Enter and label credit amount.
2. Enter and label debit amount.
3. Record the adjusting entry.
Lesson 20-1, page 530
© South-Western
Educational Publishing

4. POSTING AN ADJUSTING ENTRY FOR
UNCOLLECTIBLE ACCOUNTS EXPENSE
1. Debit
2. Credit
1 2
Lesson 20-1, page 531
© South-Western
Educational Publishing

5. TERMS REVIEW
uncollectible accounts
allowance method of recording losses
from uncollectible accounts
book value
book value of accounts receivable
Lesson 20-1, page 532
© South-Western
Educational Publishing