Which of the following is a contra account?
A)Bad Debts
B)Accounts Receivable Recoveries
C)Allowance for Doubtful Accounts
D)Credit Sales

Question

Quizplus · Accepted Answer

The Allowance for Doubtful Accounts is a contra account because it is directly related to Accounts Receivable, but has a credit balance instead of a debit balance. This account represents the estimated amount of uncollectible accounts and is used to reduce the balance of Accounts Receivable to its net realizable value. Option A, bad debts, is an expense account, and options B and D are both revenue accounts.

Which of the Following Is a Contra Account