The Allowance for Doubtful Debts Account Has a Debit Balance

question 70

Multiple Choice

The Allowance for doubtful debts account has a debit balance of $9000 before the adjusting entry for bad debt expense.After analysing the accounts in the accounts receivable subsidiary ledger,the company's management estimates that uncollectable accounts will be $13,000.What will be the amount of the adjustment in the Allowance for doubtful debts account?

• A)$22,000
• B)$13,000
• C)$21,250
• D)$20,900

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Definitions:

Applied Factory Overhead

Costs indirectly associated with manufacturing, including expenses such as utilities and management salaries, allocated to specific products or departments.

Direct Materials

Raw materials that are directly traceable to the manufacturing of a specific product.

Continuous Process

A production method used to manufacture, produce, or process materials without interruption.

Conversion Cost

The combined costs of direct labor and manufacturing overhead involved in transforming materials into finished goods.