An allowance for doubtful accounts is a:

A Revenue account

B Contra asset account that estimates the portion of accounts receivable expected to be uncollectible

C Liability

D Expense account

✓ Correct Answer: Option B

Allowance for doubtful accounts: contra AR account, reduces net AR to estimated realizable value. Bad debt expense recognized on income statement. Methods: percentage of sales or aging.

💡 Why is B) the correct answer?

The correct answer to the question "An allowance for doubtful accounts is a:" is Option B: Contra asset account that estimates the portion of accounts receivable expected to be uncollectible.

The other options — A) Revenue account, C) Liability, D) Expense account — are incorrect for this Pre-MBA Exam Prep question. As explained above: Allowance for doubtful accounts: contra AR account, reduces net AR to estimated realizable value. Bad debt expense recognized on income statement. Methods: percentage of sales or aging.

📚 About This Pre-MBA Exam Prep Practice Question

This 2-level Pre-MBA Exam Prep question from the Accounting topic is part of BrainForge Quiz's free exam preparation library. Each question includes the correct answer and a detailed explanation to help you understand the underlying concept, not just memorize the answer.

How to use this page: Read the question above, consider all four options (A through D), then check the highlighted correct answer and explanation. For active timed practice, start a free Pre-MBA Exam Prep practice test or use flashcards for spaced repetition review.

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An allowance for doubtful accounts is a:

✓ Correct Answer: Option B

📚 About This Pre-MBA Exam Prep Practice Question

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