why is allowance for doubtful accounts an asset?
428670
An allowance for doubtful accounts is considered a “contra asset,” because it reduces the amount of an asset, in this case the accounts receivable. The allowance, sometimes called a bad debt reserve, represents management's estimate of the amount of accounts receivable that will not be paid by customers.
1363426
The problem I have had is that Reckon has been categorising these payments as an asset (and therefore reports show a falsely positive financial position ... these payments aren't really an asset as they are to make provision for a future tax liability).
1269276
Drawing is neither an asset or liability of business. ... By taking money in the form of drawing, his capital will decrease. So, we show it as deduction of capital in the balance sheet. It will be doubtful, if you will deem it as an asset or liability.
1118505
It's contra asset account, called allowance for doubtful accounts, will have a credit balance. ... In other words, the net accounts receivable amount. This happens because the contra asset account has already accounted for bad debts or those that are not likely to be collected.
590384
The allowance for doubtful accounts is used to anticipate that some accounts receivable will not be collected. ... U.S. GAAP requires the accrual of losses from uncollectible receivables if a loss is probable and the amount of the loss can be reasonable estimated (FASB ASC 450-20-25-2).
237249
The allowance for doubtful accounts. The allowance for doubtful accounts is a reduction of the total amount of accounts receivable appearing on a company's balance sheet, and is listed as a deduction immediately below the accounts receivable line item. This deduction is classified as a contra asset account.
806507
As a result the bad debts expense is more closely matched to the sale. When a specific account is identified as uncollectible, the Allowance for Doubtful Accounts should be debited and Accounts Receivable should be credited.
1188956
['First locate net accounts receivables on the balance sheet.', 'Then, find allowance for doubtful accounts or allowance for bad debt on the balance sheet.', 'Add net receivables to the allowance for doubtful accounts to calculate gross receivables.']
1357823
The provision for doubtful debts is the estimated amount of bad debt that will arise from accounts receivable that have been issued but not yet collected. It is identical to the allowance for doubtful accounts. ... The two line items can be combined for reporting purposes to arrive at a net receivables figure.
268537
The allowance for doubtful accounts is a contra-asset account that records the amount of receivables expected to be uncollectible. The allowance is established in the same accounting period as the original sale, with an offset to bad debt expense.
1001098
The “allowance for receivables” is typically titled “Allowance for Doubtful Accounts” or “Allowance for Bad Debt” and has a credit balance and is considered a 'contra-asset' because this balance offsets the debit balance in “Accounts Receivable” where the net result is reported as “Accounts Receivable, net” in the ...
1366359
Fixed assets have a debit balance on the balance sheet. By having accumulated depreciation recorded as a credit balance, the fixed asset can be offset. In other words, accumulated depreciation is a contra-asset account, meaning it offsets the value of the asset that it is depreciating.
436025
The amount is reflected on a company's balance sheet as “Allowance For Doubtful Accounts”, in the assets section, directly below the “Accounts Receivable” line item. Doubtful accounts are considered to be a contra account, meaning an account that reflects a zero or credit balance.
133688
In accounting, a valuation account is usually a balance sheet account that is used in combination with another balance sheet account in order to report the carrying amount of an asset or liability. An example of a valuation account that is associated with an asset is the Allowance for Doubtful Accounts.
895689
The credit balance in this account comes from the entry wherein Bad Debts Expense is debited. ... As a result the bad debts expense is more closely matched to the sale. When a specific account is identified as uncollectible, the Allowance for Doubtful Accounts should be debited and Accounts Receivable should be credited.
783413
Your car may be considered an asset because you can sell it for a large amount of money. This can help in emergency situations and may help you to get out from underneath the loan. But your car is not an investment. ... It is important to realize as you make your car purchases that they are not investments.
608468
Overview of the Allowance for Doubtful Accounts The allowance for doubtful accounts is a reduction of the total amount of accounts receivable appearing on a company's balance sheet, and is listed as a deduction immediately below the accounts receivable line item. This deduction is classified as a contra asset account.