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

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Answer:

Given:

Allowance for Doubtful Accounts is a credit of $760

Written off accounts = $120

Accounts totaling = $740

The end-of-year balance (before adjustment) in Allowance for Doubtful Accounts will be computed as:

Allowance for Doubtful Accounts - Accounts totaling + Written off accounts

⇒ $760 - $740 + $120

⇒ $140

therefore, the correct option is (c).

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