Karma's entry to recognize the write-off of the uncollectible accounts will
A)increase total assets and total equity.
B)increase total assets and decrease total equity.
C)decrease total assets and total equity.
D)not affect total assets or total equity.

Question

Quizplus · Accepted Answer

The write-off decreases both the allowance for doubtful accounts account (a contra-asset) and accounts receivable (an asset) equally. Therefore, there is no net affect n assets or equity.

Karma's Entry to Recognize the Write-Off of the Uncollectible Accounts