The Balance of the Allowance for Doubtful Accounts Was $12,656

question 45

Multiple Choice

The balance of the Allowance for Doubtful Accounts was $12,656 at the beginning of the year and $14,348 at the end of the year.Bad Debt Expense was $3,879 for the year.Recoveries in the amount of $100 were recorded during the year.Which of the following statements is correct?

• A)The Allowance for Doubtful Accounts account was retroactively debited for $2,187 to record additional bad debts that became apparent in a future time period.
• B)The Allowance for Doubtful Accounts account was debited for $2,287 to record write-offs during the year.
• C)The Allowance for Doubtful Accounts account was credited $2,287 for payments from customer whose account balances were previously written off.
• D)The Allowance for Doubtful Accounts account was credited $2,187 for the difference between the percent of credit sales method and the aging of accounts receivable method.

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Definitions:

Shareholders

Individuals or entities that own shares in a corporation, giving them ownership interests in the company.

Best Interest

Acting with primary regard for someone's benefits and well-being, often used in a fiduciary or advisory context.

In-The-Money

This describes an option that has intrinsic value, being a call option with a strike price below the current market price or a put option with a strike price above the current market price.