The Allowance for Bad Debts Account Has a Debit Balance

question 161

Multiple Choice

The Allowance for Bad Debts account has a debit balance of $9,000 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 $13,000.What amount of bad debts expense will be reported on the income statement?

• A)$5,000
• B)$22,000
• C)$4,000
• D)$13,000

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Definitions:

Entrepreneurial Activity

Initiatives taken by individuals to create, organize, and manage a business venture to make profit, often in the face of risk.

Strategic Alliances

Partnerships between two or more companies that combine resources, knowledge, and capabilities to pursue mutual interests or goals.

Shared Urgency

A situation or condition where a group of individuals collectively feel a compelling need to act promptly or swiftly.

Relationship Capital

The value derived from an organization's relationships with its customers, partners, and stakeholders.