Allowance for Doubtful Accounts Has a Credit Balance of $900

question 15

Multiple Choice

Allowance for doubtful accounts has a credit balance of $900 at the end of the current year (prior to adjustment) . An analysis of the aged accounts in the customers' ledger indicates uncollectible accounts of $16,000. The adjusting entry would require a debit to:

• A)bad-debt expense for $15,100.
• B)bad-debt expense for $16,900.
• C)allowance for doubtful accounts for $15,100.
• D)allowance for doubtful accounts for $16,900.

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Definitions:

Par

The face value of a bond or stock as stated by the issuing company, which may differ from its market value.

Face Value

The nominal value printed on a financial instrument, such as a bond or a stock certificate.

Semiannual Interest

Interest on a loan or bond that is calculated and paid twice a year.

Face Value

The nominal or dollar value printed on a bond, note, or other financial instrument, representing the amount due at maturity.