Allowance for Doubtful Accounts is

Multiple Choice

• deducted from Sales in the Revenue section of the income statement.

• listed in the Liabilities section of the balance sheet.

• listed in the Operating Expenses section of the income statement.

• subtracted from Accounts Receivable in the Assets section of the balance sheet.

When preparing financial statements, merchandise inventory is shown as

Multiple Choice

• a liability on the balance sheet.

• an asset on the balance sheet.

• revenue on the income statement.

• an addition to capital on the statement of owner's equity.