what is the type of account and normal balance of allowance for doubtful accounts?
allowance for doubtful accounts. Allowance for Doubtful Accounts is a contra current asset account associated with Accounts Receivable. When the credit balance of the Allowance for Doubtful Accounts is subtracted from the debit balance in Accounts Receivable the result is known as the net realizable value of the Accounts Receivable. The credit balance in this account comes from the entry wherein Bad Debts Expense is debited.
Here, the account Bad debt expense is a normal expense category account whose balance increases with a debit transaction. The other account, Allowance for doubtful accounts, is an asset category account, but it is also a contra asset account.