The Allowance for Bad Debts Account Has a Debit Balance

question 120

Multiple Choice

The Allowance for Bad Debts account has a debit balance of $6,000 before the adjusting entry for bad debts expense.After analyzing the accounts in the accounts receivable subsidiary ledger,the company's management estimates that uncollectible accounts will be $11,000.What will be the amount of the adjustment in the Allowance for Bad Debts account?

• A)$16,250
• B)$11,000
• C)$15,900
• D)$17,000

---

Definitions:

Price of Desks

The amount of money required to purchase a desk, determined by factors like supply, demand, and production costs.

Supply

the total amount of a specific good or service that is available to consumers.

Inferior Good

A type of good for which demand decreases as the income of the individual increases, inversely related to income.

Normal Good

A good for which demand increases as the income of the consumer increases, reflecting a direct relationship between income and demand.