Accounts receivable are adjusted for doubtful accounts (i.e., accounts that may not be paid).

Question

Accounts receivable are adjusted for doubtful accounts (i.e., accounts that may not be paid).​

Quizplus · Accepted Answer

Accounts receivable are adjusted for doubtful accounts to reflect the amount that is expected to be collected, taking into consideration any potential losses due to non-payment. This is typically done through the use of an allowance for doubtful accounts, which is a contra-asset account that offsets the accounts receivable balance.

Accounts Receivable Are Adjusted for Doubtful Accounts (I