A Debit Balance in Allowance for Doubtful Accounts

question 102

Multiple Choice

A debit balance in Allowance for Doubtful Accounts

• A) is the normal balance for that account
• B) indicates that actual bad debt write-offs have been less than what was estimated
• C) cannot occur if the percentage of receivables method of estimating bad debts is used
• D) indicates that actual bad debt write-offs have exceeded previous provisions for bad debts

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Definitions:

Correlation

A numeric indicator that shows the degree to which two or more variables change in relation to each other.

T Test

A statistical test that compares the means of two groups to determine if there is a statistically significant difference between them.

Error In Prediction

The difference between the observed score (Y) and the predicted score.

Standard Error

A measure of the statistical accuracy of an estimate, indicating the variability of sampling distributions.