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Flyer prepares an aging of accounts receivable and the result shows that 4% of accounts receivable is estimated to be uncollectible. What is the balance in the allowance for doubtful accounts after bad debt expense is recorded?

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Answer: The balance in allowance for doubtful accounts after bad debt expense is recorded is any existing balance in the allowance for doubtful accounts plus the bad debt expense.

Explanation: The question is not complete but balance in allowance for doubtful accounts can arrived at by constructing a movement schedule as follows:

Opening balance                                           $XXX

Addition (Bad debt expense)                         XXX

Write-off                                                           (XXX)

Balance at end of the period/year               XXX