The Allowance for Bad Debts Account Has a Credit Balance

question 76

Multiple Choice

The Allowance for Bad Debts account has a credit balance of $5,000 before the adjusting entry for bad debts expense.The company's management estimates that 5% of net credit sales will be uncollectible for the year 2017.Net credit sales for the year amounted to $280,000.What is the amount of Bad Debts Expense reported on the income statement for 2017?

• A)$14,000
• B)$19,000
• C)$7,000
• D)$9,000

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Definitions:

Deductive Step

A step in reasoning in which one proceeds logically from premises to a definite conclusion, ensuring the conclusion necessarily follows.

Evidence

Information or facts that are used to support a belief, conclusion, or argument.

Inductive Step

A crucial part of mathematical proof in inductive reasoning, where one shows that if a property holds for one case, then it also holds for the next case.

Inductive Generalizations

The process of inferring general principles from specific observations.