Indicate how each event affects the financial statements. Use the following letters to record your answer in the box shown below. If an event increases one account and decreases another account equally within the same element, record I/D. If an event has no impact on the element, record NA. You do not need to enter dollar amounts.
Increase = I Decrease = D Not Affected = NA
On December 31, Year 1, Sparkes Company estimated it had $12,000 of uncollectible accounts related to credit sales it made during the year. Sparkes, which uses the allowance method, made the necessary adjustment to record this estimate.

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The Answer of Indicate how each event affects the financial statements. Use the following letters to record your answer in the box shown below. If an event increases one account and decreases another account equally within the same element, record I/D. If an event has no impact on the element, record NA. You do not need to enter dollar amounts.
Increase = I Decrease = D Not Affected = NA
On December 31, Year 1, Sparkes Company estimated it had $12,000 of uncollectible accounts related to credit sales it made during the year. Sparkes, which uses the allowance method, made the necessary adjustment to record this estimate.

Indicate How Each Event Affects the Financial Statements