On the balance sheet,the allowance for doubtful accounts:
A)is included in current liabilities.
B)increases the reported net value of accounts receivable.
C)appears under the heading "Other Assets."
D)is deducted from accounts receivable.

Question

Quizplus · Accepted Answer

The allowance for doubtful accounts is a contra asset account that is deducted from accounts receivable on the balance sheet. This is done to reflect the amount of accounts receivable that may not be collected due to customers' nonpayment. Therefore, option D is correct.

On the Balance Sheet,the Allowance for Doubtful Accounts