Under the allowance method, if uncollectible account write-offs during the year exceed the allowance amount, the balance in allowance for doubtful accounts at year end prior to adjustment:
A)will be zero.
B)should be deducted from accounts receivable.
C)will be a debit.
D)should be adjusted by debiting it to bring the balance back to zero.

Question

Quizplus · Accepted Answer

When write-offs exceed the allowance amount, the allowance for doubtful accounts will have a debit balance because the write-offs have reduced the allowance below zero.

Under the Allowance Method, If Uncollectible Account Write-Offs During the Year