Question

Identify the statement below that is true regarding the Allowance for Doubtful Accounts account. Multiple Choice The account has a normal credit balance and is reported on the balance sheet. The account has a normal debit balance and is reported on the balance sheet. The account has a normal credit balance and is reported on the income statement. The account has a normal debit balance and is reported on the income statement.

Answer 1

Answer: The account has a normal credit balance and is reported on the balance sheet.

Explanation:

The allowance for doubtful accounts refers to the amount of account receivable that the company believes will not be paid by the customers. It is referred to as the bad debt reserve as well.

The allowance for doubtful accounts reduces the accounts receivable. It also has a normal credit balance and is reported on the balance sheet.