Question

Under the allowance method for estimating uncollectible​ accounts: A. a company sets up an Allowance for Uncollectible Accounts to estimate the amount of the receivables the company does not expect to collect. B. the Allowance for Uncollectible Accounts will normally have a credit balance. C. the Allowance for Uncollectible Accounts is a contra account to gross Accounts Receivable. D. all of the above.

Answer 1

Answer:

D. all of the above.

Explanation:

Allowance for doubtful accounts or Uncollectible accounts: It is that account in which the estimation amount would be recorded which can be received or not depending upon the circumstances.  

It generally has a credit balance. Moreover, it also has a contra account as it deducted from the accounts receivable ending balance which is shown under the asset side of the balance sheet.  

Thus, all the given statements are true.