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:

Problems Associated

refers to the various issues or difficulties that can be connected or related to a specific situation, condition, or context.

Psychological Effects

The impact or changes in an individual's mental state, behavior, or emotions due to various stimuli or experiences.

Physical Effects

The tangible or bodily outcomes that result from an action, condition, or disease, which can be observed and measured.

Stimulants

Substances that increase activity in the nervous system, resulting in increased alertness, attention, and energy.