Bert had accounts receivable of 350000 and an allowance for

Bert had accounts receivable of $350,000 and an allowance for doubtful accounts of $13,000 just before writing off as worthless an account receivable from Ernie Company of $2,500. After writing off this receivable what would be the balance in Bert\'s Allowance for Doubtful Accounts? Multiple Choice

$13,000 credit balance.

$15,500 credit balance.

$10,500 credit balance.

$10,500 debit balance.

I am assuming its 10,500 credit balance?

Solution

Allowance for Doubtful Accounts is a credit account. When debtors are written off, Allowance for Doubtful Accounts is debited and accounts receivable is credited.

Hence, correct option is $10,500 credit balance.