Describe the allowance for doubtful accounts balance

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Reference no: EM13753352

Which of the following statements does not correctly describe the allowance for doubtful accounts balance?

It is reported on the balance sheet as a component of current assets.

It is a contra-asset account.

It is reported on the balance sheet as a stockholders' equity account.

It is created as a result of the adjusting entry to record bad debt expense.

Reference no: EM13753352

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