A2Z Events The following data are from the company's records for 2012:
$\begin{array}{ll}
\text {Credit sales during the year } &\$ 2,400,000 \
\text {Accounts Receivable-December 31, 2012} &410,000 \
\text {Allowance for Doubtful Accounts-December 31, 2012 } &55,000\
\text {Bad debt expense for the year } &70,000
\end{array}$
-Refer to A2Z Events.What are the effects on the accounting equation when the company writes off a bad debt under the allowance method?

Question

A2Z Events The following data are from the company's records for 2012:
$\begin{array}{ll}
 \text {Credit sales during the year } &\$ 2,400,000 \
 \text {Accounts Receivable-December 31, 2012} &410,000 \
 \text {Allowance for Doubtful Accounts-December 31, 2012 } &55,000\
 \text {Bad debt expense for the year } &70,000
\end{array}$ 
-Refer to A2Z Events.What are the effects on the accounting equation when the company writes off a bad debt under the allowance method?

Quizplus · Accepted Answer

When a company writes off a bad debt under the allowance method, it reduces both the Accounts Receivable and the Allowance for Doubtful Accounts by the same amount, resulting in no net effect on total assets or stockholders' equity.

A2Z Events the Following Data Are from the Company's Records