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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