Which of the following is true about bad debt expense?
A)it should appear on the statement of financial position as a contraasset.
B)it should appear on the income statement as a contra revenue.
C)it should appear on the income statement as part of selling expenses.
D)it should not appear in the financial statements.

Question

Quizplus · Accepted Answer

Bad debt expense should appear on the income statement as part of selling expenses, as it is an expense related to the company's sales operations. It represents the amount of sales that are not expected to be collected and is therefore deducted from the revenue to arrive at the net sales figure. Options A, B, and D are all incorrect as they incorrectly describe the treatment of bad debt expense in financial statements.

Which of the Following Is True About Bad Debt Expense