Question

Both Fowler Landscaping and Stanley Cleaning Services have estimated their uncollectible accounts for 2018 to be $3,500. In addition, both companies use the allowance method for uncollectible accounts. If Stanley Cleaning Services has to record a larger adjusting entry for their Allowance for Doubtful Accounts account at the end of 2017, what can you assume about the balance of the Allowance for Doubtful Accounts account for each company?

Answer 1

Explanation: Stanley cleaning services unlike Fowler landscaping had to recorded a larger adjusting to their Allowance for doubtful accounts for year ending 2017 due to a higher percentage of bad debts recorded for the year that had to be written off