Allowance for Doubtful Accounts is classified as a (n) ______ account and has a normal ______ balance.
A) owner's equity, credit
B) contra asset, debit
C) owner's equity, debit
D) contra asset, credit

Question

Allowance for Doubtful Accounts is classified as a (n) ______ account and has a normal ______ balance.​
A) owner's equity, credit
B) contra asset, debit
C) owner's equity, debit
D) contra asset, credit

Quizplus · Accepted Answer

Allowance for Doubtful Accounts is a contra asset account, meaning it offsets the balance of an asset account (Accounts Receivable), and it normally has a credit balance because it reduces the total amount of receivables reported on the balance sheet.

Allowance for Doubtful Accounts Is Classified as a (N) ______