What Is the Type of Account and Normal Balance of Allowance

question 67

Multiple Choice

What is the type of account and normal balance of Allowance for Doubtful Accounts?

• A) Contra asset, credit
• B) Asset, debit
• C) Asset, credit
• D) Contra asset, debit

---

Definitions:

Credit Terms

Conditions under which credit is extended by a lender to a borrower, including the repayment period and interest rate.

Direct Quotation

A currency quotation method where the local currency is fixed, and the foreign currency varies.

Bid-ask Spread

The difference between the highest price a buyer is willing to pay for an asset (bid) and the lowest price a seller is willing to accept (ask).

Bid Rate

The price at which a buyer is willing to purchase a security, currency, or commodity, often used in financial markets to specify the maximum price a buyer is comfortable with.