It is possible for the allowance account to have a debit balance before the adjusting entry is recorded.

Question

Quizplus · Accepted Answer

The allowance account may have a debit balance before an adjusting entry is made if the company has estimated that there will be more bad debts than there actually are. This results in an overestimation of the allowance for doubtful accounts, resulting in a debit balance in the allowance account.

It Is Possible for the Allowance Account to Have a Debit