Which of the following statements about the Allowance for Doubtful Accounts is correct?
A)The Allowance for Doubtful Accounts is credited when a specific write-off is recorded.
B)Under the aging of accounts receivable method,Bad Debt Expense is calculated and then added to the beginning balance in the Allowance for Doubtful Accounts.
C)The Allowance for Doubtful Accounts is a contra-revenue account.
D)The Allowance for Doubtful Accounts has a normal credit balance.

Question

Quizplus · Accepted Answer

The Allowance for Doubtful Accounts is a contra-asset account;as such,it has a normal credit balance.Specific write-offs are recorded with a debit to Allowance for Doubtful Accounts and a credit to Accounts Receivable.Under the aging of accounts receivable method,the desired ending balance of the Allowance for Doubtful Accounts is determined,and then an entry is made to adjust the Allowance for Doubtful Accounts account to the desired balance.

Which of the Following Statements About the Allowance for Doubtful