Anybody doing Accountancy?
I wld approaching to ask why does an Allowance for Receivables a/c hold a cr match? It sounds close to an expense to me, shdn't it own a dr be a foil for?
Answers:
You are right. The allowance for doubtful debts expense IS an expense article, but don't forget every debit must enjoy a credit. So where on earth's your credit? It's the Allowance for doubtful debts a/c which is contra against the A/cs Receivable a/c. The entry is:
Dr Allowance for doubtful debts expense (expense item)
Cr Allowance for doubtful debts (balance sheet item)
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Answers:
You are right. The allowance for doubtful debts expense IS an expense article, but don't forget every debit must enjoy a credit. So where on earth's your credit? It's the Allowance for doubtful debts a/c which is contra against the A/cs Receivable a/c. The entry is:
Dr Allowance for doubtful debts expense (expense item)
Cr Allowance for doubtful debts (balance sheet item)