One might infer from a debit balance in Allowance for Doubtful Accounts that
A) the percentage of receivables basis is being used.
B) bad debts expense has been overestimated.
C) a posting error has been made.
D) more accounts have been written off than had been estimated.

Question

Quizplus · Accepted Answer

A debit balance in Allowance for Doubtful Accounts suggests that more accounts have been written off than initially estimated, indicating that the allowance was insufficient to cover the actual bad debts.

One Might Infer from a Debit Balance in Allowance for Doubtful