A company has a $10,000 credit balance in its Allowance for Doubtful Accounts
A company has a $10,000 credit balance in its Allowance for Doubtful Accounts. After writing off $5,000 in bad debts, the allowance balance is:
A. $0
B. $5,000
C. $10,000
D. $15,000
Answer: B
Explanation: Write-off: Debit Allowance $5,000, Credit Accounts Receivable $5,000. New allowance balance = $10,000 – $5,000 = $5,000.

