At the beginning of the year, the balance in the Allowance for Doubtful Accounts is a credit of $640. During the year, $350 of previously written-off accounts were reinstated and accounts totaling $410 are written-off as uncollectible. The end of the year balance (before adjustment) in the Allowance for Doubtful Accounts should be
A) $760
B) $410
C) $580
D) $700

Question

Quizplus · Accepted Answer

At the beginning of the year, the balance in the Allowance for Doubtful Accounts was a credit of $640. During the year, $350 of previously written-off accounts were reinstated, so the balance in the allowance account increases by $350 to $990 ($640 + $350).

Then, accounts totaling $410 are written off as uncollectible, which means the allowance account has to be reduced by that amount. The balance in the allowance account at the end of the year (before adjustment) is therefore $990 - $410 = $580.

Therefore, the best choice is option C, $580.

At the Beginning of the Year, the Balance in the Allowance