Allowance for Doubtful Accounts Has a Credit Balance of $800

question 102

Multiple Choice

Allowance for Doubtful Accounts has a credit balance of $800 at the end of the year (before adjustment) , and an analysis of accounts in the customer ledger indicates the estimated amount of uncollectible accounts should be $16,000. Based on the estimate above, which of the following adjusting entries should be made?

• A) debit Bad Debt Expense, $800; credit Allowance for Doubtful Accounts, $800
• B) debit Bad Debt Expense, $15,200; credit Allowance for Doubtful Accounts, $15,200
• C) debit Allowance for Doubtful Accounts, $800; credit Bad Debt Expense, $800
• D) debit Bad Debt Expense, $16,800; credit Allowance for Doubtful Accounts, $16,800

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Definitions:

Observational Learning

The method of learning that occurs through observing the behavior of others and the outcomes of those behaviors.

Classical Conditioning

An associative learning process where a neutral stimulus comes to elicit a response after being paired with a stimulus that naturally brings about that response.

Vicariously

Experiencing something through the actions or experiences of another person, rather than firsthand.

Reinforcing Outcomes

Consequences that increase the probability of a behavior being repeated by providing a reward or removing a negative stimulus.