Question

Calculator At the beginning of the year, the balance in the Allowance for Doubtful Accounts is a credit of $555. During the year, $322 of previously written off accounts were reinstated and accounts totaling $721 are written off as uncollectible. The end of the year balance in the Allowance for Doubtful Accounts should be:_________

A. $156
B. $555
C. $721
D. $322

Answer 1

A. $156

Step-by-step explanation:

Data provided

Credit of Allowance for Doubtful Accounts = $555

Previous written-off accounts = $322

Written-off as uncollectible = $721

The computation of balance in the Allowance for Doubtful Accounts is shown below:-

End of the year balance in the Allowance for Doubtful Accounts = Credit of Allowance for Doubtful Accounts + Previous written-off accounts - Written-off as uncollectible

= $555 + $322 - $721

= $877 - $721

= $156

Therefore, for computing the balance in the Allowance for Doubtful Accounts we simply applied the above formula.