The contra-asset account used to provide for an estimate of uncollectible accounts is
A)Bad Debt Expense.
B)Allowable Accounts Receivable.
C)Allowance for Doubtful Accounts.
D)A/R subledger.

Question

Quizplus · Accepted Answer

The contra-asset account used to provide for an estimate of uncollectible accounts is the Allowance for Doubtful Accounts. This account is used to adjust the Accounts Receivable balance to its estimated realizable value, based on an estimate of the amount of accounts that will not be collected. A is incorrect because Bad Debt Expense is an expense account used to record the write-off of specific uncollectible accounts. B and D are incorrect choices because they are not contra-asset accounts and do not provide for an estimate of uncollectible accounts.

The Contra-Asset Account Used to Provide for an Estimate of Uncollectible