A debit balance in the Allowance for Doubtful Accounts
A) is the normal balance for that account.
B) indicates that actual bad debt write offs are higher than previous provisions for bad debts.
C) indicates that actual bad debt write offs have been less than what was estimated.
D) cannot occur if the percentage of receivables method of estimating bad debts is used.

Question

Quizplus · Accepted Answer

A debit balance in the Allowance for Doubtful Accounts suggests that the actual write-offs of bad debts have exceeded the amounts previously estimated and provided for in the allowance account.

A Debit Balance in the Allowance for Doubtful Accounts