Allowance for Doubtful Accounts Has a Debit Balance of $1,100

question 109

Multiple Choice

Allowance for Doubtful Accounts has a debit balance of $1,100 at the end of the year (before adjustment) , and an analysis of customers' accounts indicates uncollectible receivables of $12,900. Which of the following entries records the proper adjustment for Bad Debt Expense?

• A) debit Bad Debt Expense, $14,000; credit Allowance for Doubtful Accounts, $14,000
• B) debit Allowance for Doubtful Accounts, $14,000; credit Bad Debt Expense, $14,000
• C) debit Allowance for Doubtful Accounts, $11,800; credit Bad Debt Expense, $11,800
• D) debit Bad Debt Expense, $11,800; credit Allowance for Doubtful Accounts, $11,800

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Definitions:

Market Index

A statistical measure that represents the performance of a group of stocks, bonds, or other assets, serving as a benchmark to track financial and economic performance.

Forecasted Market Return

The estimated average return expected from the market as a whole over a specified future period, based on historical data and economic indicators.

T-Bill Rate

The yield on short-term U.S. government debt securities, known as Treasury bills, which serve as a benchmark for short-term interest rates.

Adjusted Beta

A beta value modified to account for a stock's historical volatility and tendency to revert to the market mean.