The Bad Debt Expense account is classified:

Question

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The Bad Debt Expense account represents the cost that a seller incurs by extending credit to customers who are unable to pay their debts. Thus, it is classified as the cost to the seller of extending credit. It is not a contra-asset account (A) because it does not directly offset the Accounts Receivable account. It is also not part of cost of goods sold (B) because it is not directly related to the production or purchase of goods. Additionally, it is not deducted from Accounts Receivable on the balance sheet (D) because it is an expense account and not a contra-account.

The Bad Debt Expense Account Is Classified