Asked by Azreen Azahari on Apr 25, 2024
Verified
Allowance for Doubtful Accounts is a contra asset account.
Contra Asset Account
An account offset against an asset account on the balance sheet.
Allowance for Doubtful Accounts
An accounting provision that represents a company's estimate of invoices that will not be paid by customers.
- Gain insight into the criteria for valuing and reporting receivables in financial statements.
Verified Answer
DF
Diana Ferman7 days ago
Final Answer :
True
Explanation :
Allowance for Doubtful Accounts is a contra asset account because it reduces the overall amount of accounts receivable on the balance sheet by reflecting the estimated amount that will not be collected from customers.
Learning Objectives
- Gain insight into the criteria for valuing and reporting receivables in financial statements.