Allowance for Doubtful Accounts on the statement of financial position
A)is included in current liabilities.
B)increases the net realizable 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 used to reduce the balance of accounts receivable to its net realizable value. It represents the amount of accounts receivable that the company anticipates will not be collected. As such, it is deducted from accounts receivable on the statement of financial position.

Allowance for Doubtful Accounts on the Statement of Financial Position