Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 2 - No. 31)
Which of the following describes a contra-asset account?
It decreases the value of an asset.
It increases the value of an asset.
It has a normal credit balance.
It is a liability.
Explanation
A contra-asset account reduces the book value of an asset. The allowance for doubtful accounts is a contra-asset account.
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