A Debit Balance in the Allowance for Uncollectible Accounts Before

question 66

True/False

A debit balance in the Allowance for Uncollectible Accounts before adjustment indicates that last year's estimate of uncollectible accounts was too low.

---

Definitions:

Bad Debts

Money owed to a company that is unlikely to be paid and written off as a loss.

Credit Policy

The guidelines a company follows to determine credit terms, credit limits, and collection procedures for its customers.

Overdue Accounts

Accounts receivable that have not been paid by the due date, indicating delayed payments from customers.

Lock Box

A banking service provided to companies for the collection of payments from customers, where the payments are sent directly to a post office box, then quickly processed by the bank.