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Your business uses the allowance method to account for uncollectible receivables. At the beginning of the​...

Your business uses the allowance method to account for uncollectible receivables. At the beginning of the​ year, Allowance for uncollectible accounts had a credit balance of $1,000. During the year you wrote off bad receivables of $2,500 and recorded Bad debt expense of $3,000. What is your​ year-end balance in Allowance for uncollectible​accounts?

A. $1,500

B. $3,500

C. $4,000

D. $3,000

Business   Accounting   
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Homework Answers

Answer #1
  • Allowance account gets increased by the amount of Bad Debt Expense and decreased by the amount of Accounts that were written off.
  • Working

Beginning Balance

$             1,000.00 Credit

Accounts written off

$           (2,500.00)

Bad Debt Expenses

$             3,000.00

Year end balance

$             1,500.00 Credit

  • Correct Answer = Option ‘A’ $ 1,500
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