PRC-1 · Chapter 5 · Question 54 of 100
How is the 'Allowance for Doubtful Debts' account fundamentally classified within the general ledger?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) A contra for asset account
Explanation
The allowance for doubtful debts carries a credit balance and is presented in the statement of financial position as a deduction from Gross Trade Receivables, making it a contra-asset account.
More Bad and Doubtful Debts MCQs
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