One might infer from a debit balance in allowance for doubtful accounts that

Question

Trenton Browning

Business

22 September, 17:14

One might infer from a debit balance in allowance for doubtful accounts that

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Answers (1)

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Mercedes Mcpherson · Answer 1

The answer is:

More accounts have been written off than had been estimated

Explanation:

Doubtful debt or bad debt is an expense. According to the rule of accounting, debit increases an expense while debit decreases an expense.

So the debit balance balance in allowance for doubtful accounts tells us that there is an increase in expense which means that more accounts (bad debt) have been written off.

So we can infer from the debit balance that more accounts have been written off than had been estimated