Should the uncollectible accounts be underestimated? Norah Wang is in the process of recording adjusting entries for her employer, Happy Kennels. She is evaluating the uncollectible accounts and...

Should the uncollectible accounts be underestimated?

Norah Wang is in the process of recording adjusting entries for her employer, Happy Kennels. She is evaluating the uncollectible accounts and determining the amount of bad debts expense to record for the year. Her manager, Gillian Tedesco, has asked that Norah underestimate the amount of uncollectible accounts for the year. Gillian is hoping to get a bank loan for an expansion of the kennel facility, and she is concerned that the net income of the company will be too low for a loan to be approved. What should Norah do?