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

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Business

Autumn

17 May, 15:29

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

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Mathias Mcpherson · Answer 1

Option C) $140

Explanation:

When the company anticipate its losses the entry is:

Bad Debts Expense - $760 - Debit

Allowance for Doubtful Accounts - $760 - Credit

When the accounts were written-off:

Allowance for Doubtful Accounts $740 - Debit

Accounts Receivable - $740 - Credit

Allowance for Doubtful Accounts Balance $ 20

When the previously written-off accounts were reinstated

Accounts Receivable - $120 - Debit

Allowance for Doubtful Accounts - $120 - Credit

Balance at the end of the year in the Allowance for Doubtful Accounts $140.