Ace Computing Company
On January 1, the Accounts Receivable and the Allowance for Doubtful Accounts carried balances of $40,000 and $1,500 respectively. During the year, the company reported $80,000 of credit sales. There were $500 of receivables written off as uncollected during the year. Cash collections of receivables amounted to $78,200. The company estimates that it will be unable to collect 4% of the year-end accounts receivable balance.
-Refer to the Ace Computing Company. The entry to recognize the write-off of the specific uncollected accounts will act to

Question

Quizplus · Accepted Answer

Writing off uncollected accounts refers to removing the amount from the accounts receivable balance and the allowance for doubtful accounts balance. This does not affect total assets or stockholders' equity because the balances decrease by the same amount.

Ace Computing Company on January 1, the Accounts Receivable and the Allowance for the Allowance