The Allowance for Bad Debts Account Has a Credit Balance

question 208

Multiple Choice

The Allowance for Bad Debts account has a credit balance of $8000 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 $15,000.What will be the balance of the Allowance for Bad Debts reported on the balance sheet?

• A) $15,000
• B) $7000
• C) $23,000
• D) $13,500

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Definitions:

Average Fixed Costs

The fixed costs (expenses that do not change with the level of output) divided by the quantity of output produced. It decreases as output increases.

Output

The total amount of goods or services produced by a business, industry, or economy.

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The Third Industrial Revolution refers to the period marked by the digital revolution and the use of electronics and information technology to automate production that began in the late 20th century.

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A process of making three-dimensional solid objects from a digital file, typically by laying down many thin layers of a material in succession.