Allowance for bad debts and investment in affiliates are most likely to be shown as what types of accounts? Allowance for bad debts Investment in affiliates A) Contra-asset Asset B) Contra-asset Liabilities C) Liabilities Asset D) Liabilities Liabilities Answer is A. Can anyone explain?
never heard of a “contra-asset asset”
The question is not talking about “contra-asset asset”… Allowance for bad debts is a contra asset account, meaning it reduces an asset, and it is recorded on the assets’ side. Investment in affiliates is an asset, just like any other investment for a company. You’re not going to find easy questions like this on the exam.