Allowance for Doubtful Accounts may, at times, have a debit balance.

Name: Allowance for Doubtful Accounts may, at times, have a debit balance.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Allowance for Doubtful Accounts is a contra-asset account, which means it is used to reduce the balance of accounts receivable to their net realizable value. This means that if the balance in the allowance account is greater than the balance in the accounts receivable account, the allowance account will have a debit balance.

Allowance for Doubtful Accounts May, at Times, Have a Debit