Allowance for Doubtful Accounts Has a Credit Balance of $800

question 185

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 that 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:

Sustainability

Practices and strategies for maintaining ecological balance by avoiding depletion of natural resources.

Balance

An equilibrial state where different elements are in the correct proportions or positions, often used figuratively to denote a well-proportioned mix of work, life, and activities.

Incremental Sustainable Change

Gradual and continuous modifications implemented in an organization or system that aim to improve sustainability without disrupting existing processes significantly.

Transition Phases

Transition phases refer to periods of change or transformation within an organization or an individual's life, often marked by developments or adjustments to new conditions.