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A company has $70,000 in outstanding accounts receivable and it uses the allowance method to account for uncollectible accounts. Experience suggests that 5% of outstanding receivables are uncollectible. The current credit balance (before adjustments) in the allowance for doubtful accounts is $1,750. The journal entry to record the adjustment to the allowance account includes a debit to Bad Debts Expense for $5,000. a) True b) False

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