The Allowance for Bad Debts Account Has a Credit Balance

question 172

Multiple Choice

The Allowance for Bad Debts account has a credit balance of $2,000 before the adjusting entry for bad debts expense. The company's management estimates that 4% of net credit sales will be uncollectible for the year 2019. Net credit sales for the year amounted to $250,000. What is the amount of Bad Debts Expense reported on the income statement for 2019?

• A) $10,000
• B) $12,000
• C) $5,000
• D) $8,000

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Definitions:

Data Breaches

Unauthorized access to, disclosure or theft of, sensitive, protected or confidential data.

Voice Portals

Automated telephone systems that allow users to access information and perform transactions using speech recognition and voice commands.

Flight Status

Information about the progress of an aircraft's flight, including times of departure and arrival, as well as any delays or cancellations.

Wireless System

Technology enabling the transmission of data over distances without the need for wires or cables, using electromagnetic waves.