The Allowance for Bad Debts account ________.
A) is a liability account
B) holds the pool of "unknown" uncollectible accounts
C) increases with a debit
D) is added to accounts receivable

Question

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The Allowance for Bad Debts account holds the estimated amount of uncollectible accounts, also known as the "pool of unknown bad debts." This account is used to record a portion of accounts receivable that is expected to be uncollectible. It is not a liability account, does not increase with a debit, and is not added to accounts receivable.

The Allowance for Bad Debts Account ________