The Allowance for Bad Debts account has a credit balance of $8000 before the adjusting entry for bad debts expense.After analyzing the accounts in the accounts receivable subsidiary ledger using the aging-of-receivables method,the company's management estimates that uncollectible accounts will be $15,000.What will be the balance of the Allowance for Bad Debts reported on the balance sheet?
A) $15,000
B) $7000
C) $23,000
D) $13,500

Question

Quizplus · Accepted Answer

The balance in the Allowance for Bad Debts account after the adjustment will be $15,000, as the adjustment is made to bring the allowance balance to the estimated uncollectible amount, not to add to the existing balance.

The Allowance for Bad Debts Account Has a Credit Balance