The Allowance for Bad Debts Account Has a Debit Balance

question 68

Multiple Choice

The Allowance for Bad Debts account has a debit balance of $9,000 before the adjusting entry for bad debts expense. After analyzing the accounts in the accounts receivable subsidiary ledger using the aging-of-receivables method, the company's management estimates that uncollectible accounts will be $11,000. What amount of bad debts expense will be reported on the income statement?

• A) $8,000
• B) $20,000
• C) $2,000
• D) $11,000

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Definitions:

Raymond Cattell

A psychologist known for his research in personality, intelligence testing, and the development of the 16 Personality Factors (16PF) questionnaire.

Overextraction of Factors

The analytical error of identifying more factors or components in a data set than are realistically present, often leading to misleading interpretations.

Underextraction of Factors

In factor analysis, this refers to not identifying enough factors to adequately describe the variability in a set of data, potentially missing important dimensions.

Superfactors

Broad, overarching personality dimensions that encompass a range of related traits, often mentioned in the context of personality psychology.