A Debit Balance in the Allowance for Doubtful Accounts

question 45

Multiple Choice

A debit balance in the Allowance for Doubtful Accounts

• A) is the normal balance for that account.
• B) indicates that actual bad debt write offs are higher than previous provisions for bad debts.
• C) indicates that actual bad debt write offs have been less than what was estimated.
• D) cannot occur if the percentage of receivables method of estimating bad debts is used.

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Definitions:

Capacity

The maximum amount that something can contain or the ability to perform or produce.

Broadbent

Refers to Donald Broadbent, a British cognitive psychologist known for his research on attention and the filtering of information.

Treisman

Likely refers to an individual, possibly Anne Treisman, who is known for her work in cognitive psychology, specifically in attention and perception.

Black Labrador

A specific breed of retriever dog known for its solid black coat, often prized as a companion, service, or working dog.