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A Debit Balance In The Allowance For Doubtful Accounts indicates that the Actual Bad Debts Written Off are more than the previous allowance for doubtful accounts or doubtful debts or we estimate less uncollectible accounts expense than actual one under allowance method. So, the correct answer of this multiple choice question (mcq) is (b). So, a debit balance of Allowance For Doubtful Accounts occurs when we estimate that a percentage of account receivable or sales will not be received / collected from customers in future is less than the actual amount of bad debts which is to be written off and as a result accounts receivable's balance decreased on balance sheet. The effect of debit balance of allowance for doubtful accounts on Income Statement is that Net Income is overstated as less amount of uncollectible accounts expense is charged while asset side shows more balance as less amount of AFDA is deducted from accounts receivable on balance sheet but liabilities & equi...

An Aging Of A Company's Accounts Receivable Indicates That $6,000 Are Estimated To Be Uncollectible. If Allowance For Doubtful Accounts Has A $2,000 Debit Balance, The Adjustment To Record Bad Debts For The Period Will Require A The correct answer is (a), as we need to debit Uncollectible Accounts Expense Account (Estimated Bad Debts Expense Account) with the $8000 amount and credit Allowance For Doubtful Debt Accounts with the $8000 amount in order to adjust it for the period. Required Balance                        $6000 Balance Before Adjustment   - ($2000)                                                    __________ Adjustment Required                 $8000                   ...