A debit balance in the Allowance for Uncollectibles appears on the balance sheet.

Question

Quizplus · Accepted Answer

A debit balance in the Allowance for Uncollectibles would indicate that more money has been set aside for potential uncollectible accounts than is actually necessary. This would result in an overstatement of the amount of expenses associated with bad debt and would not be a correct presentation of the company's financial standing. Therefore, a debit balance in the Allowance for Uncollectibles would be considered an error or a misrepresentation on the balance sheet.

A Debit Balance in the Allowance for Uncollectibles Appears on the Balance