The Allowance for Doubtful Debts Has a Credit Balance of $8000

question 84

Multiple Choice

The Allowance for doubtful debts has a credit balance of $8000 before the adjusting entry for bad debt expense.After analysing the accounts in the accounts receivable subsidiary ledger using the ageing method,the company's management estimates that uncollectable accounts will be $15,000.What will be the amount of bad debts expense reported on the income statement?

• A)$23,000
• B)$8000
• C)$15,000
• D)$7000

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Definitions:

Incentive Pay

A form of compensation designed to reward employees for their performance and productivity, often linked to specific performance targets.

Predefined Behaviors

Specific actions or reactions that are established in advance to guide responses in particular situations or under certain conditions.

Standard Hour Plan

An incentive plan that pays workers extra for work done in less than a preset "standard time."

Merit Pay

A pay system where employees are compensated based on their performance, as determined through evaluations, with the aim of rewarding high performance.