At the beginning of the year, the balance in Allowance for Doubtful Accounts is a credit of $760. During the year, $120 of previously written off accounts are reinstated and accounts totaling $740 are written off as uncollectible. The end-of-year balance (before adjustment) in Allowance for Doubtful Accounts should be
A) $760
B) $120
C) $140
D) $740

Question

At the beginning of the year, the balance in Allowance for Doubtful Accounts is a credit of $760. During the year, $120 of previously written off accounts are reinstated and accounts totaling $740 are written off as uncollectible. The end-of-year balance (before adjustment) in Allowance for Doubtful Accounts should be  
A) $760
B) $120
C) $140
D) $740

Quizplus · Accepted Answer

End-of-year balance of Allowance for Doubtful Accounts = Beginning Allowance for Doubtful Accounts + Previously written off accounts reinstated - Accounts written off as uncollectibles = $760 + $120 - $740 = $140

At the Beginning of the Year, the Balance in Allowance