The trial balance of Allen Ltd at balance date showed a credit balance of $80 000 in the Allowance for doubtful debts account.Although the account of a customer standing at $16 000 had been determined to be uncollectable,this had not been written off.What was the effect of this neglect on the year-end balance sheet?
A) There was an understatement of total liabilities.
B) There was an overstatement of total assets and shareholders' equity.
C) There was an understatement of total assets and shareholders' equity.
D) There was no effect on total liabilities,assets or shareholders' equity.

Question

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The Answer of The trial balance of Allen Ltd at balance date showed a credit balance of $80 000 in the Allowance for doubtful debts account.Although the account of a customer standing at $16 000 had been determined to be uncollectable,this had not been written off.What was the effect of this neglect on the year-end balance sheet?
A) There was an understatement of total liabilities.
B) There was an overstatement of total assets and shareholders' equity.
C) There was an understatement of total assets and shareholders' equity.
D) There was no effect on total liabilities,assets or shareholders' equity.

The Trial Balance of Allen Ltd at Balance Date Showed