The balance of the Allowance for Doubtful Accounts account is reported as
A) a liability on the balance sheet.
B) a deduction from Sales on the income statement.
C) a deduction from Accounts Receivable on the balance sheet.
D) an expense on the income statement.

Question

Quizplus · Accepted Answer

The Allowance for Doubtful Accounts is a contra asset account that is deducted from Accounts Receivable on the balance sheet to reflect the amount of expected uncollectible accounts. It is not reported as a liability or an expense, and it does not affect sales on the income statement.

The Balance of the Allowance for Doubtful Accounts Account Is