The Allowance for Bad Debts Account Has a Credit Balance

question 111

Multiple Choice

The Allowance for Bad Debts account has a credit balance of $8,300 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 $14,700.What will be the balance of the Allowance for Bad Debts reported on the balance sheet?

• A)$14,700
• B)$6,400
• C)$23,000
• D)$13,230

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Definitions:

Assigned

The process of designating or allocating resources, responsibilities, or tasks to individuals or groups.

Subunit Activities

Activities or tasks performed by individual parts of an organization, contributing to the overall operational goals.

Volume-Based Cost Driver

A measure that allocates costs based on the volume of goods produced or services rendered, such as units produced or hours worked.

Factory Floor Area

The physical space within a manufacturing facility where goods are produced or processed.