Using the allowance method, the uncollectible accounts for the year is estimated to be $40,000. If the balance for the Allowance for Doubtful Accounts is a $9,000 debit before adjustment, what is the amount of bad debt expense for the period?
A) $9,000
B) $31,000
C) $40,000
D) $49,000

Question

Quizplus · Accepted Answer

The bad debt expense is calculated by adjusting the Allowance for Doubtful Accounts to the estimated uncollectible amount. Since the account has a $9,000 debit balance, you need to add $49,000 to reach the $40,000 credit balance, resulting in a $49,000 bad debt expense.

Using the Allowance Method, the Uncollectible Accounts for the Year