Allowance for Doubtful Accounts Has a Debit Balance of $2,500

question 39

Multiple Choice

Allowance for Doubtful Accounts has a debit balance of $2,500 at the end of the year (before adjustment) , and bad debt expense is estimated at 4% of credit sales. If credit sales are $800,000, the amount of the adjusting entry to record the estimate of the uncollectible accounts

• A) is $29,500
• B) is $34,500
• C) is $32,000
• D) cannot be determined

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Definitions:

Probability

The likelihood of a specific outcome occurring, quantified as a number between zero and one, zero indicating impossibility and one indicating certainty.

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The calculation of the likelihood of an event's occurrence, represented as a numeric value between 0 and 1.