Bad Debts Expense is a contra account to the Sales account.

Bad Debts Expense

An expense reported on the income statement, representing the estimate of receivables that are not expected to be collected.

Contra Account

An account used in the ledger to offset a related or a parent account, often showing the amount of reductions or adjustments to the main account.

Sales Account

An account in the general ledger that records the sales of goods or services.

Learn about the processes and necessity of determining uncollectible accounts and handling the allowance for doubtful accounts.

Verified Answer

Yuvraj AhujaJun 29, 2024

Final Answer :

False

Explanation :

Bad Debts Expense is a contra account to Accounts Receivable, not the Sales account. It is used to record the estimated amount of receivables that are expected not to be collected.

Learning Objectives

Learn about the processes and necessity of determining uncollectible accounts and handling the allowance for doubtful accounts.

Bad Debts Expense is a contra account to the Sales account.

Definitions

Learning Objectives

Learning Objectives

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