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

question 77

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:

Tangible Attributes

The physical characteristics of a product that can be sensed, such as its size, shape, weight, and texture.

Intangible Attributes

Characteristics of a product or service that cannot be physically touched or measured, such as brand reputation or customer service quality.

Organizational Buyers

Those who make purchasing decisions on behalf of a company or organization, often including considerations like bulk buying, contractual negotiations, and supplier relationships.

Nondurable Good

Products that are consumed or are only usable for a short period before they are depleted or become unusable.