The Allowance for Bad Debts Has a Credit Balance of $8000

question 131

Multiple Choice

The Allowance for Bad Debts 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 amount of Bad Debts Expense reported on the income statement?

• A) $23,000
• B) $7000
• C) $15,000
• D) $8000

Grasp the variations in social stratification and work culture across different countries.

Recognize and differentiate between cultural customs, social mores, and taboos.

Identify the impact of religion on social and economic behaviors.

Comprehend the concept of culture and its influence on societal norms and values.

---

Definitions:

Variable Costing

An accounting method that only considers variable costs (costs that fluctuate with production levels) in the calculation of product cost.

Absorption Costing

A costing approach that encompasses all costs associated with production, including direct materials, direct labor, and all overhead costs, both variable and fixed, in the unit cost of a product.

Ending Inventory

The total value of all unsold goods a company has at the end of an accounting period.

Gross Margin

The difference between sales revenue and the cost of goods sold, indicating the basic profitability of the products or services sold.