The balance of the Allowance for Doubtful Accounts was $12,656 at the beginning of the year and $14,348 at the end of the year.Bad Debt Expense was $3,879 for the year.Recoveries in the amount of $100 were recorded during the year.Which of the following statements is correct?
A)The Allowance for Doubtful Accounts account was retroactively debited for $2,187 to record additional bad debts that became apparent in a future time period.
B)The Allowance for Doubtful Accounts account was debited for $2,287 to record write-offs during the year.
C)The Allowance for Doubtful Accounts account was credited $2,287 for payments from customer whose account balances were previously written off.
D)The Allowance for Doubtful Accounts account was credited $2,187 for the difference between the percent of credit sales method and the aging of accounts receivable method.

Question

Quizplus · Accepted Answer

We have all of the information about the changes in the account except for the write-offs.
Ending balance in Allowance for Doubtful Accounts = Beginning credit balance in Allowance for Doubtful Accounts − Write-offs + Recoveries + Bad Debt Expense
Write-offs = Beginning credit balance in Allowance for Doubtful Accounts + Recoveries + Bad Debt Expense − Ending balance in Allowance for Doubtful Accounts
= $12,656 + $100 + $3,879 − $14,348 = $2,287

The Balance of the Allowance for Doubtful Accounts Was $12,656