Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 26 - No. 7)
What is the effect of recording an allowance for doubtful accounts on the balance sheet?
Increases total assets.
Decreases total assets.
Increases total liabilities.
Has no effect on total assets or liabilities.
Explanation
The allowance account reduces the reported value of accounts receivable, which are assets.
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