What is the contra account used to accumulate totals against accounts receivable?

The contra account used to accumulate totals against accounts receivable is the allowance for bad debt. This account is created to recognize the amount of accounts receivable that may ultimately be uncollectible, allowing businesses to present a more accurate picture of their expected revenues. By establishing this allowance, businesses can reduce the total accounts receivable on their balance sheet to reflect the true realizable value.

The allowance for bad debt is important in the context of accounting because it adheres to the matching principle, ensuring that revenues are matched with the expenses associated with potentially uncollectible accounts during the same accounting period. Properly accounting for bad debts helps in financial reporting and analyzing the company's financial health.

The other options serve different functions. Accumulated depreciation relates to the decline in value of tangible fixed assets over time. Loan loss reserves refer specifically to financial institutions needing to set aside funds to cover expected loan defaults, while a sales discount account is used to track discounts offered on sales rather than to recognize uncollectible receivables. Each of these accounts plays a different role in financial statements and does not function as a counterpart to accounts receivable in the same manner as the allowance for bad debt.