Accounts that are linked together have opposite typical balances and are reported as deductions from the balance of the connected account. The cumulative depreciation expense for all previous periods during which the asset was utilized is included in the accumulated depreciation contra account.
2) Book value, also known as the net amount, is the asset's cost less the total amount of accumulated depreciation.
On the same financial statement as the associated account, contra accounts are reported. A contra asset account, often known as an allowance for dubious accounts, is a counter account to accounts receivable.
The provision for dubious accounts or bad debt reserve are other names for this category of accounts. The amount of the current accounts receivable balance is represented by the balance in the allowance for doubtful accounts.
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