The Beginning Credit Balance in the Allowance for Doubtful Accounts

question 48

Multiple Choice

The beginning credit balance in the allowance for doubtful accounts is $12,656 and the ending credit balance is $14,348. If bad debt expense was $3,879, which of the following statements is true?

• A) The allowance account was retroactively debited $2,187 for additional bad debts that became apparent in a future time period.
• B) The allowance account was debited $2,187 for write-offs of actual bad debts.
• C) The allowance account was credited $2,187 for recoveries of bad debts.
• D) The allowance account was credited $2,187 for the difference between the percent of credit sales method and the aging of accounts receivable method.

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Definitions:

Task Performance

The degree to which an individual or group successfully completes a given task or set of tasks.

Work Expended

The amount of effort, time, or resources invested in performing a job or accomplishing a task.

Controlling

Refers to the management function that involves measuring performance, comparing it with goals, and taking corrective action as needed to ensure that organizational objectives are achieved.

Measuring Performance

The process of evaluating the efficiency and effectiveness of action or operation, typically involving the comparison of actual outcomes with desired results or standards.