If a company's Allowance for Doubtful Accounts has a debit balance immediately prior to year-end adjusting entries . fewer accounts have been written off than had been estimated. Bad Debt Expense has been underestimated. a posting error has been made. the direct method is being used. O the company does not extend credit to customers.

If a company's Allowance for Doubtful Accounts has a debit balance immediately prior to year-end adjusting entries . fewer accounts have been written off than had been estimated. Bad Debt Expense has been underestimated. a posting error has been made. the direct method is being used. the company does not extend credit to customers