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QUESTION
Instead of reducing A/R directly, we create a contra-asset account Allowance for Doubtful Accounts (ADA). Instead of reducing revenues directly, we...
Instead of reducing A/R directly, we create a contra-asset account Allowance for Doubtful Accounts (ADA). Instead of reducing revenues directly, we create an expense account Bad Debt Expense. Accounting for Bad Debt Where is Allowance for Doubtful Accounts on balance sheet? Accounts Receivable Less: Allowance for Doubtful Accounts Net Accounts Receivable Where is Bad Debt Expense on income statement?
