Allowance for Doubtful Accounts Has a Credit Balance of $800

question 102

Multiple Choice

Allowance for Doubtful Accounts has a credit balance of $800 at the end of the year (before adjustment) , and an analysis of accounts in the customer ledger indicates the estimated amount of uncollectible accounts should be $16,000. Based on the estimate above, which of the following adjusting entries should be made?

• A) debit Bad Debt Expense, $800; credit Allowance for Doubtful Accounts, $800
• B) debit Bad Debt Expense, $15,200; credit Allowance for Doubtful Accounts, $15,200
• C) debit Allowance for Doubtful Accounts, $800; credit Bad Debt Expense, $800
• D) debit Bad Debt Expense, $16,800; credit Allowance for Doubtful Accounts, $16,800

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Definitions:

Excretes Waste

The process by which living organisms remove or expel waste materials from their bodies.

Hepatic Portal Vein

A blood vessel that carries blood from the gastrointestinal tract and spleen to the liver, rich in nutrients and toxins.

Nutrient-rich Blood

Blood that is high in oxygen and nutrients, supplied by the circulatory system to feed cells throughout the body.

Liver

A large essential organ in the body involved in numerous metabolic processes, including detoxification, protein synthesis, and the production of biochemicals necessary for digestion.