Using the allowance method, the uncollectible accounts for the year is estimated to be $56,000. If the balance for the Allowance for Doubtful Accounts is a $14,000 credit before adjustment, what is the amount of bad debts expense for the period?

Question

Quizplus · Accepted Answer

The bad debts expense for the period is equal to the estimated uncollectible accounts minus the balance in the allowance account at the beginning of the period. Therefore, the bad debts expense for the period is $56,000 - $14,000 = $42,000. Therefore, the correct answer is B.

Using the Allowance Method, the Uncollectible Accounts for the Year