Using the allowance method, the uncollectible accounts for the year is estimated to be $40,000. If the balance for the Allowance for Doubtful Accounts is a $9,000 credit before adjustment, what is the amount of bad debt expense for the period?
A) $9,000
B) $31,000
C) $40,000
D) $49,000

Question

Quizplus · Accepted Answer

The bad debt expense is calculated as the estimated uncollectible accounts ($40,000) minus the existing credit balance in the Allowance for Doubtful Accounts ($9,000), resulting in $31,000.

Using the Allowance Method, the Uncollectible Accounts for the Year