Which of the following is true of the proper balance sheet treatment of the Allowance for Bad Debts with a credit balance?

Question

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The Allowance for Bad Debts is a contra account related to accounts receivable, meaning it offsets the accounts receivable balance. Therefore, it should be shown as a separate line item under current assets with a credit balance. This treatment follows the matching principle in accounting, where expenses (such as bad debts) are recognized in the same period as the revenue they relate to (accounts receivable).

Which of the Following Is True of the Proper Balance