Earl Company uses the accrual method of accounting. Here is a reconciliation of Earl's allowance for bad debts for the current year. $\begin{array}{l}
\text { Beginning allowance for bad debts }&\$950,000 \
\text { Actual write-offs of accounts receivable during the } \
\text { year } &(899,600)\
\text { Addition to allowance } &845,000\
\text { Ending allowance for bad debts }&\$895,400
\end{array}$ Which of the following statements is true?

Question

Quizplus · Accepted Answer

Bad debt expense for the year is calculated as the addition to the allowance ($845,000), not the actual write-offs. The deduction for bad debts is the actual amount written off during the year ($899,600).

Earl Company Uses the Accrual Method of Accounting Which of the Following Statements Is True? A) Bad Debt

Earl Company Uses the Accrual Method of Accounting Which of the Following Statements Is True?
A) Bad Debt