Allowance for Doubtful Accounts Has a Credit Balance of $1,300

question 71

Multiple Choice

Allowance for Doubtful Accounts has a credit balance of $1,300 at the end of the year (before adjustment) . The company prepares an analysis of customers' accounts to estimate the amount of uncollectible accounts of $41,900. Which of the following adjusting entries would be made to record the Bad Debt Expense for the year?

• A) debit Allowance for Doubtful Accounts, $40,600; credit Bad Debt Expense, $40,600
• B) debit Allowance for Doubtful Accounts $43,200; credit Bad Debt Expense, $43,200
• C) debit Bad Debt Expense, $43,200; credit Allowance for Doubtful Accounts, $43,200
• D) debit Bad Debt Expense, $40,600; credit Allowance for Doubtful Accounts, $40,600

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Definitions:

Bodily Damages

Physical injury or harm to a person's body, often a term used in legal contexts regarding compensation.

Breach Of Contract

Occurs when one party fails to fulfill their obligations under a contract, violating the agreement.

Private Law

Private law governs the relationships between private individuals or entities, dealing with issues such as contracts, property, and family relations, distinguishing it from public law which involves the state.

Civil Law

A legal system based on written codes or statutes, in contrast to common law, which is based on judicial decisions and precedents.