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The Allowance For Doubtful Accounts Is A Contra Asset Account That Equals To Total Uncollectible Accounts Reason: As we know that Allowance For Doubtful Accounts is a Contra Asset Account which is deducted from closing balance of Accounts Receivable on Balance Sheet in order to calculate the Net Realizable Value (NRV) of Accounts Receivable , so mathematically, we can say that: Net Realizable Value = Accounts Receivable - Allowance For Doubtful Accounts Net Realizable Value + Allowance For Doubtful Accounts = Accounts Receivable Allowance For Doubtful Accounts = Accounts Receivable - Net Realizable Value As Accounts Receivable - Net Realizable Value = Total Uncollectible Accounts So, we have the following result as shown below: Allowance For Doubtful Accounts = Total Uncollectible Accounts So, we can say that Allowance For Doubtful Accounts is equal to Accounts Receivable minus Net Realizable Value of Accounts Receivable which represent total estimated uncollecti

Answer Of MCQ The Correct Answer of this multiple choice question is (E) as under Accrual Basis of Accounting , we record Revenue when it is earned by the company whether the cash is received or not. As the company performed the services to the customer, so the company earned the revenue. So, we debit Accounts Receivable Account  with an amount of $10,000  as the amount of revenue not yet received by the company from the customer and credit Sales Revenue Account .