Your Company Uses the Aging of Accounts Receivable Method

question 53

Multiple Choice

Your company uses the aging of accounts receivable method.Net credit sales are unchanged from last year,the year-end balance in Accounts Receivable is unchanged from the previous year's ending balance,and there were no write-offs during the current year.The company previously averaged about 20% of its total accounts receivable in the "over 90 days past due" category and now has 35% in this category at the end of the current year.The dollar amount of the adjustment to record Bad Debt Expense in the current year:

• A) decline, thus increasing the ending balance of the Allowance for Doubtful Accounts account.
• B) increase, thus increasing the ending balance of the Allowance for Doubtful Accounts account.
• C) decline, thus reducing the ending balance of the Allowance for Doubtful Accounts account.
• D) increase, thus reducing the ending balance of the Allowance for Doubtful Accounts account.

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