If the Credit Balance of the Allowance for Doubtful Accounts

question 120

Multiple Choice

If the credit balance of the Allowance for Doubtful Accounts account exceeds the amount of a bad debt being written off, the entry to record the write-off against the allowance account results in:

• A) An increase in the expenses of the current period.
• B) A reduction in current assets.
• C) A reduction in equity.
• D) No effect on the expenses of the current period.
• E) A reduction in current liabilities.