Which of the Following Statements Does Not Correctly Describe the Allowance

question 17

Multiple Choice

Which of the following statements does not correctly describe the allowance for doubtful accounts balance?

• A)It is reported on the balance sheet as a component of current assets.
• B)It is a contra-asset account.
• C)It is reported on the balance sheet as a stockholders' equity account.
• D)It is created as a result of the adjusting entry to record bad debt expense.

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Definitions:

Cardiovascular

Pertains to the system comprising the heart and blood vessels, responsible for circulating blood throughout the body.

Muscular

Relating to or involving the muscles, which are tissues in the body responsible for movement.

Skeletal

Relating to the skeleton, the internal framework of bones that supports the body and facilitates movement.