A Debit Balance In The Allowance For Doubtful Accounts Shows | MCQ Answer

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. 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 will not be received from customers in future is less than the actual amount of bad debts which is to be returned off.