The balance of the Allowance for Doubtful Accounts account is reported as
A)a deduction from Sales on the income statement.
B)an addition to Accounts Receivable on the balance sheet.
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 account is a contra-asset account, which means it has a credit balance. It is used to reduce the value of Accounts Receivable on the balance sheet to reflect the amount that the company does not expect to collect from customers. Therefore, the balance of the Allowance for Doubtful Accounts account is reported as a deduction from Accounts Receivable on the balance sheet.

The Balance of the Allowance for Doubtful Accounts Account Is