Gross Accounts Receivable is $18,000. Allowance for Doubtful Accounts has a credit balance of $300. Net credit sales for the year are $150,000. In the past, 2% of credit sales had proved uncollectible, and an aging of the receivables indicates $2,100 as uncollectible. What would be the adjusted balance of the Allowance account under the balance sheet approach?
A) $1,800
B) $3,300
C) $2,100
D) $2,400

Question

Quizplus · Accepted Answer

Under the balance sheet approach, the Allowance for Doubtful Accounts is directly adjusted to reflect the estimated uncollectible amount based on the aging of the receivables, which is $2,100 in this case.

Gross Accounts Receivable Is $18,000