One Might Infer from a Debit Balance in Allowance for Doubtful

question 97

Multiple Choice

One might infer from a debit balance in Allowance for Doubtful Accounts that

• A)a posting error has been made.
• B)more accounts have been written off than had been estimated.
• C)the direct method is being used.
• D)Bad Debt Expense has been overestimated.

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Definitions:

Unforeseeable Events

Circumstances or incidents that could not have been predicted or expected and therefore may relieve parties from liability in contracts under the doctrine of force majeure.

Contract Obligations

Responsibilities and duties that parties are legally bound to perform as per the terms of a contract.

Commercial Impracticability

A doctrine in contract law that excuses a party from fulfilling their contractual obligations due to unforeseen, extreme hardships.

Revoking Acceptance

The act of legally rejecting a product or service after initially accepting it, based on certain conditions being met.