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the allowance for uncollectible accounts is a contra account to:

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anthougo

The allowance for uncollectible accounts is an example of a contra account, specifically, to the Accounts Receivable account.

In the general ledger, the contra account:

  • reduces the main or related account's value
  • preserves the main account's historical value
  • nets the main or related account to its current book value.

  • Examples of contra accounts are owner's drawings, accumulated depreciation, allowance for doubtful accounts, treasury stock, dividends, etc.

  • The contra accounts usually have opposite balances to the main accounts.  The contra account of an asset account has a credit balance while the contra account of a liability or equity account has a debit balance.

Thus, the Accounts Receivable's contra account is the Allowance for Uncollectible Accounts.

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