Using the allowance method for bad debts, the end of the period adjusting entry for estimated bad debts is:
A. Debit Accounts Receivable and credit Allowance for Doubtful Accounts.
B. Debit Allowance for Doubtful Accounts and credit Accounts Receivable.
C. Debit Bad Debts Expense and credit Accounts Receivable.
D. Debit Allowance for Doubtful Accounts and credit Bad Debts Expense.
E. Debit Bad Debts Expense and credit Allowance for Doubtful Accounts.
Answer: E
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