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:

Bonus

An additional payment or reward given to employees or organizations, often as an incentive or reward for performance.

Management By Objectives (MBO)

Systematic approach that allows managers to focus on attainable goals and to achieve the best results based on the organization’s resources.

Performance Evaluation

The systematic assessment of an employee's job performance, skills, and productivity, typically for the purpose of decisions about promotions, compensation, and development.

Autocratic Decision Making

A decision-making process where one individual has total control and makes decisions without input from others.