The Allowance for Bad Debts Account Has a Debit Balance

question 130

Multiple Choice

The Allowance for Bad Debts account has a debit balance of $9,000 before the adjusting entry for bad debt expense. After analyzing the accounts in the accounts receivable subsidiary ledger using the aging method, the company's management estimates that uncollectible accounts will be $15,000. What will be the amount of Bad debts expense reported on the income statement?

• A)$4,000
• B)$24,000
• C)$6,000
• D)$15,000

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Definitions:

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Shares of a company's stock that give the shareholder the right to vote on company matters at shareholders' meetings.

Tax Considerations

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Liability

A legal obligation or responsibility for the consequences of one's actions, potentially resulting in payment or other remedies in a legal context.

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