Asked by Oguche Agnebb on May 12, 2024
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The allowance for doubtful accounts is reported as a contra-asset on the balance sheet.
Contra-Asset
A contra-asset account is an asset account where the balance of the account will either be a zero or a negative figure, which offsets the balance of the related asset account.
Doubtful Accounts
Receivable accounts that may potentially become bad debts as the likelihood of collection is uncertain.
Balance Sheet
The balance sheet is a financial statement that shows a company's financial position at a specific point in time, listing assets, liabilities, and shareholders' equity.
- Understand the concept and reporting of allowance for doubtful accounts as a contra-asset.
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Learning Objectives
- Understand the concept and reporting of allowance for doubtful accounts as a contra-asset.
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