Question
In: Accounting
One might infer from a debit balance in Allowance for Doubtful Accounts that
One might infer from a debit balance in Allowance for Doubtful Accounts that
(a) a posting error has been made.
(b) more accounts have been written off than had been estimated would be uncollectible.
(c) the percentage of receivables basis is being used.
(d) bad debts expense has been overestimated.
Solutions
Expert Solution
(b) more accounts have been written off than had been estimated would be uncollectible.
Explanation - Allowance for doubtful accounts is a contra asset having credit balance. It is estimation of bad debt. If it has debit balance it means more accounts receivable have become uncollectible than what was originally estimated.
(b) more accounts have been written off than had been estimated would be uncollectible.
Nikita Chaplot answered 2 years agoRelated Solutions
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True
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A
B
C
D
E
F
G
H
1
Not past Due
Days Past Due
2
3
Customer
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the customer is making small but regular payments
the customer closes its business
the customer cannot be located
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