A debit balance in Allowance for Doubtful Accounts

A) is the normal balance for that account
B) indicates that actual bad debt write-offs have been less than what was estimated
C) cannot occur if the percentage of receivables method of estimating bad debts is used
D) indicates that actual bad debt write-offs have exceeded previous provisions for bad debts

Allowance for Doubtful Accounts

A contra-asset account on a company’s balance sheet that represents the estimated portion of accounts receivable that may not be collectible.

Percentage of Receivables Method

An accounting method used to estimate the amount of a company's accounts receivable that will not be collected.

Bad Debt Write-offs

The process of removing uncollectable accounts receivable from the accounting records, recognizing them as a loss.