At the end of the year, any balance in Allowance for Repairs should be

Question

Quizplus · Accepted Answer

Allowance for Repairs is a contra account to the asset account Repairs and Maintenance. At the end of the year, any balance in Allowance for Repairs should be closed to Repairs Expense to match the cost of repairs incurred during the year with the revenue earned. This will ensure that the balance sheet accurately reflects the true value of the asset. Therefore, the best choice is A, which states that the balance should be closed to Repairs Expense.

At the End of the Year, Any Balance in Allowance