Allowance for Doubtful Accounts Is a Contra Asset; Its Balance

question 2

True/False

Allowance for Doubtful Accounts is a contra asset; its balance is added to Accounts receivable.

---

Definitions:

Insurance

A financial product that provides protection against potential financial losses or liabilities arising from specific risks.

Risk Averse

Describes individuals or entities that prefer to avoid risk and would rather choose options with more certain outcomes over riskier ones.

Insurance

A financial product that provides protection against potential future losses or damages in exchange for a premium.

Risk Neutral

A condition in which an individual or entity shows indifference between choices that have different levels of risk, focusing solely on potential outcomes regardless of uncertainty.