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:

Unintentional Use

Refers to the accidental or inadvertent usage of a product or substance, often leading to unexpected results or harm.

Addictive Behaviors

Actions that a person compulsively engages in, despite negative consequences, often related to substance abuse or other dependencies.

Negative Consequences

Undesirable results or effects stemming from specific actions, decisions, or events.

MDMA

3,4-Methylenedioxymethamphetamine, a psychoactive drug primarily used for recreational purposes, known for its ability to increase feelings of empathy and pleasure.